ValuStox Portfolio

With ValuStox you can create an Excel ValuStox Portfolio based on your investment criteria. Most customers start their ValuStox Portfolio by listing their existing holdings. All you have to do to enter a stock is enter its ticker symbol on your Excel ValuStox Portfolio spreadsheet. An unlimited list of ValuStox Portfolios can be maintained consisting of stocks for possible purchase. ValuStox also supports a number of standard portfolios, such as the Dow Jones Industrials and the S&P 500.

We might create the following portfolio, usually assembled over several weeks or months as the various stocks become attractive buys:

The default criteria is to buy only companies with Financial Strength of "A" or "A+"; otherwise we might well want to buy additional shares of Amedisys, Coventry Health Care, and Mobile TeleSystems as their prices are within our criteria to make a 10% compounded return over the next 5 years.

The key to understanding how ValuStox works is based on its computation of the future 5-year price. First we project the 3-5 year Earnings Per Share (EPS), then pick a Price/Earnings ratio (P/E) that we will then use to compute the 5 year price: Projected Earnings * Projected Price/Earnings = Projected Price.

Then working backwards, ValuStox computes what our annual compound return would be if we purchased the stock at today's price and sold it in 5 years at the projected 5 year price.

For Matthews International, the projected 5-year price is $62.60. Of course, this price is only as good as the earnings consistency, as well as our ability to pick a reasonable Price/Earnings ratio. It turns out the Matthews Inc. earnings are remarkably consistent, as you can see from the following ValuStox graph:

We can also track how our portfolio is doing using the second half of the spreadsheet. Finally, before making any buys or sells, we recommend using SPREDGAR V4 to compare our target company with its peer group in terms of profitability, leverage, and liquidity.

Spredgar Software's mission is to provide unbiased financial investment data for the private investor, the professional analyst, and the academic. Gordon Gerwig, founder of Spredgar Software, has a B.S. in Electrical Engineering and Computer Science from the University of California at Berkeley and an M.B.A. in Finance from the University of California at Davis. Gordon Gerwig and Spredgar Software have been written up in Online Investing for Dummies, Online Investing Hacks, and in the Innovator, the U.C. Davis Graduate School of Management's alumni magazine. Gordon is an individual investor and a member of the American Association of Individual Investors (AAII). He is a CERTIFIED FINANCIAL PLANNER, a Licensed International Financial Analyst (LIFA) , and is an associate member of the CFA Institute. He has worked in financial services as a advisor for Morgan Stanley and American Express. He has experience in small business lending, valuation and consulting.