How it Works

The Waverley Research Method

There are many ways to approach value investing. Traditionally, value investors analyzed corporate balance sheets and tried to identify tangible assets. A value stock was one that was cheap relative to those assets. Their goal was to eliminate as much risk as possible.

A new method of value investing is emerging. Value investors are now turning to corporate income statements looking for stocks selling cheap relative to their earning power. The challenge is to identify those stocks with great earning potential and have attractive P/E ratios.

To meet this challenge Waverley Research developed an algorithm to identify strongly financed growing companies that are undervalued by the market concentrating on a small number of stocks at a time, namely, those stocks listed on the Dow Jones Industrial Average (DJIA).

This algorithm generates the Waverley Research Selections that we offer for consideration.

The Waverley Research investment approach as outlined in the "Utilizing the Waverley Research Selection" section is a buy, hold and rebalance strategy. Investors need to adapt to changes in the market and therefore need to review their investment plans/stock selections annually to ensure that their underlying assumptions haven't changed significantly and make changes that are reflective of those as they happen.