Comments on: MFI – Rule 1 Big Five Combo Screen

By: David

David — Mon, 25 Apr 2011 07:18:05 +0000

After 5 years- how has this performed?

By: Marlin

Marlin — Mon, 17 Jan 2011 03:00:09 +0000

What screening conditions would you use with Fidelity’s web site to get the “Big 5″? I would like to try it.

By: Andrew

Andrew — Mon, 21 Jan 2008 17:54:20 +0000

If you are a member of Fidelity – you can perform an advanced search with 5 YR Historical on all of Phil’s “Big 5″ that will give you all the information you need. Investools.com also has a special view within its website that provides the Rule #1 businesses. Fidelity is your cheapest option – Investools is the most expensive.

By: Jeff

Jeff — Mon, 15 Oct 2007 18:20:14 +0000

Hey man – not sure about your calcs. I think that PTEN and USNA have some possibility, but some of your others seem to fail Rule 1 numbers (at least by my calculations). My calcs have HRB at about 600% MOS – that’s not a good safety net.

My Rule 1 screen is also done in excel – I get most of my info from MSN Money (10 years backdata on most fields).

I see that this blog post is pretty old, so maybe you did the calcs on data that isn’t up to date as of Oct 2007.

By: Derek

Derek — Thu, 19 Apr 2007 00:39:53 +0000

Hi, if anyone is interested I found a list of Rule #1 qualified stocls for sale on Ebay for $25! I was skeptical but actually reviewed the list against my own MOS calculations, found several on the list (of 51 stocks in total) that had a good moat, were currently priced at MOS or below and that allowed me to invest right away.

I felt it was a bargain that let me start putting Rule #1 to work right away but will let you be the judge. Here’s the link for anyone interested:

http://cgi.ebay.com/ws/eBayISA.....&rd=1

By: Top 10 Fat Pitch Financials Posts of 2006 - Fat Pitch Financials

Top 10 Fat Pitch Financials Posts of 2006 - Fat Pitch Financials — Tue, 02 Jan 2007 17:59:36 +0000

[...] MFI – Rule 1 Big Five Combo Screen [...]

By: Hendrik Oude Nijhuis

Hendrik Oude Nijhuis — Sun, 17 Dec 2006 22:09:58 +0000

As an economic researcher and investment analyst myself I think the combination of Greenblatt an Town has produced a very interesting list. I have not calculated the exact results of the stocks selected, but I am quite sure these have produced quite an out performance!

I think it would also be useful to have a strategy on commodity stocks (like oil producers). Personally I think one could not expect high returns on capitals for these type of companies, over long time frames.

Besides of this here are many simple ‘tricks’ to improve the system a lot. I have written some reports on this (for free) on http://www.magicformulastocks.com. These ‘tricks’ have to do with the buying/selling-strategy, time frames, how to select the most promising stocks, how to identify durable competitive advantages, etc.

Success in investing,
Hendrik Oude Nijhuis
http://www.magicformulastocks.com

By: Potential Large Cap Wide Moat Companies - Rule #1 Big Five - Fat Pitch Financials

Tue, 12 Sep 2006 04:39:38 +0000

[...] I recently received an email from one of my readers asking for the list of stocks I produced when I tried to replicate Phil Town’s Rule #1 Big 5 Numbers back in May using a screen I built on Portfolio123. The Big Five Numbers are criteria Phil Town developed to help identify companies that have wide moats. Phil Town looks at five factors that consist of ROIC, equity growth, earnings growth, sales growth, and free cash flow growth that are all consistently above 10 percent for the past 10 years. [...]

By: Another method to find Rule 1 Stocks at Rule 1 Numbers

Another method to find Rule 1 Stocks at Rule 1 Numbers — Thu, 17 Aug 2006 01:10:55 +0000

[...] George at Fat Pitch Financials has come up with a way to use Portfolio123 to screen for Rule 1 stocks that also utilizes the Magic Forumla from Joel Greenblatt’s The Little Book that beats the market to find companies that have a wide moat based on the Big 5 Numbers. [...]

By: Wim

Wim — Mon, 07 Aug 2006 11:45:16 +0000

For what its worth, based on 31/5 closing prices your portfolio has gone up 6.63% (6.94% incl dividends). The S&P 900 only went up 0.41%. Looks like a good start to me. Only bad performer is Patterson (-10.8% incl dividend)

By: tweakie

tweakie — Mon, 07 Aug 2006 00:56:20 +0000

Interesting screening ideas. As for #5: Finance Google offers 6 years of data.

By: George

George — Fri, 07 Jul 2006 21:29:00 +0000

Number 5 is the annual percent gain in free cash flow from the previous year averaged over five years. I decided to build the average for each year in order to minimize any impacts of a spike in the first or last year in free cash flow for the five year period.

After playing around with this a bit, I think 5 years is not enough data to look at the free cash flow growth rate. One major capital upgrade can really screw up a five year average. If I had easy access to 10 years of FCF I might be more comfortable with this statistic.

By: James

James — Fri, 07 Jul 2006 17:44:36 +0000

I like the idea as well…i was plugging numbers in last night found it pretty difficult to find companies listed on the MagFormula site to mesh well with Rule #1 companies.

Quick question: what is #5???: # (((FCFPSA-FCFPSPY)/ FCFPSPY)+((FCFPSPY-FCFPSPY2)/FCFPSPY2)+((FCFPSPY2-FCFPSPY3)/FCFPSPY3)+((FCFPSPY3-FCFPSPY4)/FCFPSPY4))/4 > 0.1

By: buffetteer.com » K-Swiss Review

buffetteer.com » K-Swiss Review — Thu, 08 Jun 2006 05:48:41 +0000

[...] K-Swiss repeatedly shows up on magic formula screens. Here are its results: [...]

By: Jim Chan

Jim Chan — Wed, 07 Jun 2006 04:33:03 +0000

well well well… wouldn’t you know, Jim the “I know everything” Cramer just listed HRB, one of the stock on your combo pick list as a “low quality” growth suspect. See for yourself:

http://www.thestreet.com/_yaho.....;cm_ite=NA

Disclosure: I have a significant position in HRB

By: » Carnival of Investing #25 » Consumerism Commentary: A Blog About Personal Finance

Mon, 05 Jun 2006 13:04:54 +0000

[...] If they mated. George plays Dr. Frankenstein by putting the brain of Joel Greenblatt (the Magic Formula) inside the body of Phil Town (Rule #1’s Five Big Numbers). His monster creation is successful at finding great companies at reasonable prices. [...]

By: Nick

Nick — Wed, 31 May 2006 21:46:34 +0000

George,

Great work! A friend of mine had mentioned this over beers this past weekend, but having not read Rule#1 I didn’t give it a second thought. Well, I just came across your article so I hopped over to Phil Town’s site and I’m excited to read his book. I think you might have found a very effective way to futher screen MFI picks! I’m not sure about the “Tools” mentioned on Phil Town site as indicators as to when to buy and sell, but there rest seems to be well steeped in value investing philosophy!

Any way, great site and great article I’m going to link to it from my blog.

Nick

By: Anonymous

Anonymous — Wed, 31 May 2006 13:07:34 +0000

MFI – Rule 1 Big Five Combo Screen…

I combined the Joel Greenblatt’s Magic Formula with Phil Town’s Big Five Numbers to come up with a short list of potentially great sustainably profitable companies selling at cheap prices….