Welcome! This page will get you started using the service, and is a good reference to come back to later for questions.

MagicDiligence is an equity research service that aims to add a level of diligence to mechanical investing strategies similar to the "Magic Formula Investing" strategy as developed by Joel Greenblatt in his book The Little Book that Beats the Market.

This site uses its own custom screen, called the Magic Recipe Screen, to define a "universe" of stocks for consideration. We then perform focused research on these stocks, looking to comprehensively answer a few basic questions that should allow us to separate good investment opportunities from questionable ones.

By identifying both "good" and "bad" stocks from this proven mechanical screen, we hope to improve the performance of individual investors interested in utilizing this strategy.

MagicDiligence is a simple equity research services with 3 main features:

1. Magic Recipe Screen: The Magic Recipe Screen is generated daily. Inspired by Magic Formula Investing, it aims to highlight a collection of companies that are high quality (as proven by return on capital metrics), financially sound, and trading for lower-than-average multiples of their free cash flow. This combination, when used in mechanical stock picking strategies, has proven to beat the market over reasonably short holding periods (1 year or less).
2. Article Stream: Displayed on the home page, the article list is a collection of our latest new stock reports, as well as occasional stock market based news and commentary.
3. Stock Reviews: The "bread-and-butter" of the service, our stock reviews are simple and focused write-ups that focus on a few key attributes of the stock to determine its suitability for investment. We look at the stability of its revenue sources, dig into its financial health, and look for major event risks (including the risk of fraud). These are the generally the biggest risk factors in traditional "value" stocks.

MagicDiligence is designed to assist with a mechanical, value-based investing strategy.

Similar to Magic Formula Investing, investors should choose 4-6 stocks quarterly from the Magic Recipe Screen list and purchase them in equal lots. These should be held for 1 year. At the conclusion of that 1 year, the positions should be sold and replaced with 4-6 new entries from the current Magic Recipe Screen.

This mechanical strategy simply carries forward in a similar manner for as long as the investor wants to utilize it.

The value proposition of MagicDiligence is to improve your picks from this screen.

Value stocks generally have a few key risk factors that can turn them into "value traps". It is the goal of MagicDiligence to keep you out of these value traps!

By choosing "green" or "yellow" rated stocks, and avoiding "red" rated ones, we aim to improve your overall performance!

To keep it simple, we assign one of three ratings to every reviewed stock. They are a simple "stop light":

	RED. Avoid these stocks. They will often have unsustainable revenue boosts that artificially make them look like value stocks, suffer from risky financial health conditions, have major event risks like a large customer loss or patent expiration, and/or have serious fraud risk.
	YELLOW. These stocks have some risk factors, but should be acceptable choices. They may face secular challenges to their revenue streams, or have less impactful event risk, but nothing that appears business threatening.
	GREEN. These stocks should be ok to buy. We don't see any major risks to their revenue streams, they have solid financial health metrics, and there appear to be no obvious event risks on the horizon.

The "dot" ratings appear next to the company names in most places on the site. They are only shown for subscribers, and are grayed out if not logged in.

Billing is performed on a monthly basis. The cycle begins on the date of sign-up and is renewed automatically in every subsequent month if not cancelled.

For membership questions or issues, or to cancel your subscription, please use the My Membership page or contact us for help.