Richard Moore is a Covestor manager with more than 40 years of investment experience. Richard has worked for banks, mutual funds and investment advisors.
Richard believes it’s counterproductive to spend time trying to outguess the market on large, widely-followed stocks, so he screens the broad US market with models he has refined over many years that contain two main indicators to expose stocks to research. He says:
My valuation screen uses relative and adjusted EBITDA multiples compared to their industry peers. My momentum screen looks at relative price performance over the time periods in 3 month, 6 month and 12 month cycles, to restrict to those that the market indicates are outperforming their peers.
Richard manages Covestor’s Market Comparables portfolio, which follows the aforementioned strategy and has a risk score of 3. He recently sold Westell Technologies (Nasdaq: WSTL). We had a chance to ask Richard about his reasons for selling WSTL. His response:
I am using various screening techniques to come up with ideas for stocks to purchase. These screens incorporate both value and momentum components and, in some cases, I am rebalancing them weekly. WSTL fits into that category – it came onto the screen but didn’t stay there long and was replaced with a new entry. I am not doing in-depth research on these holdings – just some general due diligence. I have backtested these screens exhaustively and have confidence that the selections can out-perform the market over time.
Thanks for your interest.
Here’s how Westell has performed over the past year, via Google Finance:
