Acquirers Index
The Acquirer’s Index
A Long/Short Deep Value Index
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About The Acquirer’s Index
[/vc_column][/vc_row][vc_row inner_container=”true” no_margin=”true” padding_top=”0px” padding_bottom=”65px” border=”none” class=”center-text” bg_color=”#ffffff”][vc_column fade=”true” fade_animation=”in” fade_animation_offset=”45px” width=”1/2″]The Acquirer’s Index identifies undervalued and overvalued stocks using The Acquirer’s Multiple®.
The Index is composed of the 30 most undervalued, fundamentally strong stocks and 30 short positions of the most overvalued, fundamentally weak stocks listed in the US.
The Index is constructed with a 100% net equity exposure (130% long, 30% short). Constituent stocks are selected from the largest 25% of all stocks by number, or largest 90% by market cap (equivalent to a market cap greater than about $2.5 billion).
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The Index identifies potentially overvalued and undervalued stocks using The Acquirer’s Multiple®.
The initial universe of stocks is valued holistically—assets, earnings, and cash flows are examined—to understand the economic reality of each stock. Each stock is ranked on the basis of such valuation.
Potential components are further evaluated using statistical measures of fraud, earnings manipulation, and financial distress.
Step 2.
Each potential long component is examined for a margin of safety in three ways:
(a) a wide discount to a conservative valuation,
(b) a strong, liquid balance sheet, and
(c) a robust business capable of generating free cash flows.
Each potential short component is examined to identify:
(a) a large premium to an optimistic valuation,
(b) a weak, distressed balance sheet, and
(c) a deteriorating business and stock price.
Step 3.
Finally, a forensic-accounting due diligence review of each of the remaining potential components’ financial statements, particularly the notes and management’s discussion and analysis, is undertaken.
The Index is formed from the components passing each stage. Each undervalued position will be weighted to about 4.3% of the Index value and each overvalued position will be shorted to about 1% of the Index value.
The Index is reconstituted and rebalanced quarterly.
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The Acquirer’s Multiple®
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How to invest
Learn more about products that track the Index.
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Constituents
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See the Index
The Acquirer’s Index on Solactive.
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Contact us
Questions? Feel free to email or call us.
- tobias@acquirersmultiple.com
- 646.535.8629
Disclaimer: acquirersmultiple.com is not an investment adviser, brokerage firm, or investment company. “The Acquirer’s Multiple®” is a term used to describe the investment strategy explained in the book The Acquirer’s Multiple: How the Billionaire Contrarians of Deep Value Beat the Market.
The Acquirer’s Multiple® (TAM) constructs, publishes, and licenses indices and does not offer or provide investment advice or offer or sell any securities, commodities or derivative instruments or products, and nothing on this website should be taken as constituting financial or investment advice. Unlike its affiliates, TAM is not registered with the SEC and is not permitted to provide investment advice. Neither TAM nor its respective directors, officers, employees or affiliates make any representation regarding the advisability of investing in any security or instrument. A decision to invest in any such security or instrument should not be made in reliance on any information on this website. Inclusion of a security in an index is not a recommendation to buy, sell or hold that security.
Acquirers Funds, LLC (AF) is an affiliate of TAM, and all investment decisions for investment products and client portfolios are made independently by AF. AF is an investment adviser registered with the SEC.
© 2019 The Acquirer’s Multiple®. The Acquirer’s Multiple® is a registered trademark. All Rights Reserved.
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