Stock-Picking Strategy: Value Investing

Stock to Watch: Cloud Peak Energy Inc

NYSE:CLD

21th of October 2013

Copyright ©Akin Yalcin, MSc.

0.Contents

- 1. Intro: What is value investing?- 2. Fundamental analysis- 3. Technical analysis- 4. Conclusion

1.What is Value Investing?

• Value investing involves buying stocks that are out-of-favor in the market due to investor irrationality.

• This irrationality, in the extreme, can often push a stock’s price well below its true value.

• A shrewd value investor seeks to determine the true value of such stocks, thus taking advantage of this type of investor irrationality.

(Source: Grahaminvestor.com)

1.What is Value Investing? (2)

• Typically, value investors select stocks with lower-than-average:

- price-to-book ratio - price-to-earnings ratio - high dividend yields

(Source: Investopedia.com)

2.Fundamental AnalysisCompany Profile

2.Fundamental Analysis (2)

Comment: Relatively competitive fundamentals in comparison to industry peers

Key Fundamentals

2.Fundamental Analysis (3)Industry Peers

3. Technical Analysis Price Correlation Coal Price & CLD

3. Technical Analysis (2) 4 Year Total Return Performance

Note.CLD went public (IPO) around December 2009

3. Technical Analysis (3) 4 Year Time Period

4. Conclusion

• Stock to Watch: “CLD”• Relatively competitive fundamentals • Technical analysis: Fair value: +/- $18-20 • Hence: Short-term strategy: Buy $13.00-15.00 Sell $17.00-18.00 Long-term strategy: Buy $13.00-15.00 Sell $18.00-20.00 & >20.00