Unusual stock picks from a quantitative expert
Sabrient Systems has a strong track record, which is why its annual 'Baker's Dozen' list is getting attention.
Sure, it's fine to pick stocks using philosophical models and what-would-Buffett-do theories, but you know how Wall Street does it? With computers and algorithms. Data mining. Statistical arbitrage.Stuff you and I could never fathom.
So when one of the more respected quantitative investment shops releases its stock picks, people pay attention. And when that investment shop becomes known for beating the market year after year with those picks -- well, a lot of people pay attention.
And that's how Sabrient Systems -- and its annual picks -- got a nice writeup Friday in The Wall Street Journal. The company uses its algorithms and technological tools to pull 13 picks out of thousands of stocks.
Over the past three years, Sabrient's "Baker's Dozen" stock picks have returned 36%, 21% and 7.3% -- handily beating the Standard & Poor's 500 index ($INX).
Sabrient tells the Journal that it looked for stable, affordable stocks with the most potential for growth. "We're looking for stocks that won't vary wildly after they report earnings and will generate steady returns for one year," the chief market strategist said.
The list is remarkable because it doesn't have many well-known names. You won't see Apple (AAPL) there or any of the Dow Jones industrials.
Here's the list:
Seagate Technology (STX), which makes disk drives
Western Refining (WNR), a crude-oil refiner
Ocwen Financial (OCN), a mortgage loan servicer
Watson Pharmaceuticals (WPI), which sells generic Lipitor and other generic drugs
United Therapeutics (UTHR), which makes blood pressure medication Remodulin
Cloud Peak Energy (CLD), a Wyoming coal miner
Globe Specialty Metals (GSM), a silicon alloy maker
Dana Holding (DAN), an auto parts maker
AGCO Corp. (AGCO), an agricultural equipment maker
DXP Enterprises (DXPE), which sells industrial equipment
Kronos Worldwide (KRO), which sells pigments for coatings and plastics
United Rentals (URI), which rents equipment
Ameristar Casinos (ASCA), which owns a number of casinos throughout the country
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