Ronald Muhlenkamp Return on Equity is a quality investing strategy based on an approach used by US fund manager Ronald Muhlenkamp. It combines quality and value factors by looking for companies with a high return on equity (ROE) at a reasonable price. ROE is a measure of how much profit a company earns compared to the amount of shareholder equity on its balance sheet. Muhlenkamp compares ROE with other growth measures to find stocks that are likely to be highly cash generative. He said: "You want to be sure that the companies you own can survive whatever the heck happens." Muhlenkamp's methods were analysed by Ludwig B Chincarini and Daehwan Kim in Quantitative Equity Portfolio Management. They found that the Muhlenkamp fund averaged an 18.38% annual rate of return for the 19 years to 2004, versus 12.07% for the S&P 500.
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Renowned US investor and founder and president of the Muhlenkamp mutual fund.
Quantitative Equity Portfolio Management: An Active Approach to Portfolio Construction and Management
by Ludwig B Chincarini, Daehwan Kim
This book discusses the approach of Bill Miller, manager of Legg Mason Value Trust. He became famous for beating the S&P 500 fifteen years in a row from 1990 to 2005, although his more recent performance has not been as good, due to difficult bets on financials like Bear Stearns, Countrywide, and Freddie Mac.
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And limited to the first 200 Results
| Returns |  |
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FTSE 100 |
|---|---|---|---|---|---|---|---|---|
| 1 week | -5.5% | -1.3% | -4.1% | -3.0% | - | -4.3% | - | 0.6% |
| 1 month | -11.1% | -5.5% | -0.1% | -1.7% | - | -2.7% | - | -2.5% |
| 3 months | -4.8% | -11.3% | -3.6% | -13.5% | -2.8% | -1.0% | - | 10.5% |
| 6 months | -12.6% | -16.5% | -25.0% | -24.8% | -1.1% | 6.1% | 1.2% | 1.2% |
| 1 year | -14.1% | -21.7% | -22.6% | -10.5% | 3.7% | 7.1% | -10.2% | 3.3% |
| 2 years | 10.4% | 24.1% | 10.2% | 40.8% | 46.4% | 51.4% | -43.2% | 22.7% |
| Annualised | 8.6% | 6.1% | 0.7% | 16.6% | 27.0% | 18.0% | -31.9% | |
| Risks | ||||||||
| Max Drawdown | -26.3% | -24.9% | -41.6% | -41.2% | -19.8% | -14.7% | -59.1% | |
| Avg Holdings | 6.4 | 15.8 | 5.6 | 3.7 | 1.2 | 24.7 | 0.7 | |
| Diversification | Low | Good | Low | Low | Low | Good | Low | |
Studies based on equal weighted portfolios of max 25 stocks rebalanced quarterly. Qualifying shares below updated daily. Past performance not indicative of future returns.
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Ticker | Name | Mkt Cap £m | ROE % | ROE % 5y Avg | EPS 5y CAGR % | EPS Gwth % | P/E | P/B | Net Mgn % | Debt To Assets % | FCF | Sector | Flag |
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