I Know First Weekly Review Algorithmic Performance: September 24th, 2020


I Know First Weekly Newsletter
Investment Selection Using AI Predictive Algorithm
September 24, 2020

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I Know First Evaluation Report For Undervalued Stocks

Executive Summary

In this Know First forecast evaluation report, we will examine the performance of the forecasts generated by the I Know First AI Algorithm for the Low P/E Stocks, a subpackage of the Fundamental package, for short and long positions that were sent daily to our customers. Our Analysis covers the period from May 17, 2020, until September 9, 2020. We will start with an introduction to our asset picking for undervalued stocks and benchmarking methods. In this case, it apply to the universe covered by us in the Low PE subpackage.

undervalued stocks
Chart 1: Performance comparison for Top 20, Top 10, and Top 5 signals for Fundamental - Low P/E Stocks vs S&P 500 for shorter-term horizons from May 17, 2020, until September 9, 2020.
Chart 2: Performance comparison for Top 20, Top 10, and Top 5 signals for Fundamental - Low P/E Stocks vs S&P 500 for longer-term horizons from May 17, 2020, until September 9, 2020.

Top Undervalued Stocks Highlights

  • The Top 10 and Top 5 signal groups consistently outperformed the S&P 500 Index.
  • All the group returns had a good performance, especially the ones for the 14 days and 1-month time horizon. Every group on those time horizons registered a significant higher return than the S&P 500 Index.
  • The Top 5 signal group significantly outperformed the S&P 500 for all time horizons.

Undervalued Stocks: EPAY Bottomline Technologies Are Not Overvalued

motek 1The article was written by Motek Moyen Research Seeking Alpha’s #1 Writer on Long Ideas and #2 in Technology – Senior Analyst at I Know First.

Summary

  • Yahoo Finance’s valuation algorithm still rates Bottomline Technologies as Overvalued. This rating is despite the -25.73% 3-month performance of this company’s stock.
  • Bottomline Technologies stock, EPAY still enjoys a TTM P/E ratio valuation ratio of over 290x. This valuation is in spite of EPAY’s ghastly 1.29% net income margin.
  • My takeaway is that investors are betting on the future strength of Bottomline. The COVID-19 pandemic taught us all that digital banking is the new normal.
  • The strict implementation of social distancing, quarantines, and limited bank operations means it is tedious for people and businesses to do traditional banking.
  • I Know First’s stock-prediction system also gave a bullish one-year forecast for EPAY. I trust the wisdom of I Know First. EPAY deserves a one-year PT of $48.

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