Equity Valuation Strategies

JCN Financial Equity Valuation Strategies

JCN Financial provides a handful of valuation models that can serve a variety of goals. Speak with us today to see which approach may be best suited for your investment goals.

These equity valuation strategies are meant to help you grow and diversify your investment portfolio using a mathematical approach with a systematic application of algorithms to achieve effective risk management.

In addition to our executive staff, JCN Financial also has an amazing and dedicated team of technology professionals and consultants who are responsible for creating and implementing the research platforms that help us carry out the scientific algorithms we use in our clients’ financial strategies.

JCN Persistent Value Strategy

JCN Persistent Value Strategy (JCN-PV) is a hybrid equity valuation strategy that combines value investing (buying stocks that seem to be selling or trading for less than their book value) and smart beta investing strategies (diversifying your portfolio with lower risk) to create a quantitative and qualitative process with a strong focus on systematic risk management.

The goal of JCN-PV is to achieve better or comparable returns to the ACWI World index with substantially less volatility and total maximum drawdowns.

How it works
As your investment advisor, we begin the equity valuation process by implementing advanced data science with machine learning to run neural network algorithms that aggregate and analyze the fundamentals of every listed stock.

We screen for qualitative factors, then invest in high-quality companies that we believe are priced at a substantial discount to our estimate of their true intrinsic future value.
We run a concentrated portfolio of 12-25 companies, which allows our best ideas to drive performance.

By putting a margin of safety at the heart of our investment process, we aim to achieve competitive absolute returns and safeguard venture capital under various market conditions.

Our risk management overlay is designed so that stop losses (buying or selling a specific stock once the stock reaches a certain price) and profit targets are predetermined before any investment and dynamically adjusted during the lifecycle of each investment.

The JCN Olivia, named after the CEO of JCN Financial, John Neyland’s daughter, is what we like to call an opportunistic growth equity strategy. The process of stock selection is purely quantitative and includes risk management (stop-losses) built into the strategy.

How it works
All Olivia blended models use the “Risk-On, Risk-Off” strategy, wherein assets are dictated by changes in the investors’ risk tolerance, which will take the equity portfolio and allocate it fully to cash when the conditions show evidence to be out of the market.

The JCN Olivia opens the investable universe to all stocks in the Russell 3000 index, which tracks the performance of the 3,000 largest traded stocks in the United States.

Blending factors like momentum, quality, and growth, we build a portfolio of 12 to 25 positions.

Using the “Risk-On, Risk-Off” strategy, the idle cash will be allocated to more risk-averse investments like treasury bonds or exchange-traded funds (ETFs).

This strategy is designed for the more risk-tolerant investor who has a longer investment period. The strategy will have more beta risk than persistent value but will also have the potential for larger outperformance periods.

The JCN Momentum Rotation Strategy (JCN MR) strategy is a tactical asset allocation strategy.

How it works
Two to three bond ETFs are selected for the portfolio each month based on proprietary measures of momentum and risk. Momentum and risk are calculated by looking at the smoothed filters of price, absolute measures of momentum, and normalized by volatility.

At JCN Financial, our method of searching for the value of assets is centered around a suite of industry-scoped, multi-factor neural network equity valuation models that were designed to convert recently reported company fundamentals into a current estimated market price.

How it works
This algorithm automatically performs an appraisal by simultaneously using common stores of value, including earnings, free cash flow, book value, and dividends.

These values, along with critical modifiers such as industry, margins, debt, interest rates, and inflation, are used to determine a price appraisal.

The key advantage of using this method is that we can utilize the industry- and sector-specific interrelationships between fundamental factors that are not obvious by using classic ratio ranking methods. Energy companies have very different responses to commodity prices than utility companies do; it’s all based on the specific industry. Interest rate changes can affect valuations in different industry groups quite differently.

Additionally, by removing the biases that often come from human-made valuations, we can better assess the true value of a company given the current market environment.

Which Equity Valuation Strategy is Best for Your Needs?

JCN Financial can help you find the answer. Choosing the right equity valuation strategy for your needs can be overwhelming, and mistakes can be costly. Whether you’re a first-time investor or have a long history of investing, it never hurts to get a professional opinion on a highly complex subject.

The fiduciary investment managers at JCN Financial are dedicated to helping you find an investment path that works for your portfolio. You can rest easier knowing that every step we take in the portfolio management process is made to benefit you and you alone. We have the expertise necessary to take the reins so that you can enjoy your life. We provide comprehensive financial plans that include high-net-worth retirement and tax planning to help you fully prepare for your future.

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