Joel Greenblatt
The Magic Formula Investor
1985 - present
Use the Magic Formula to systematically find good companies at bargain prices. Rank all stocks by earnings yield and return on capital, then buy the highest-ranked. The formula works because the market regularly misprices quality businesses.
Investment Approach
- 1Ranks by earnings yield (EBIT/EV) - the higher the better
- 2Ranks by return on capital (EBIT / Net Working Capital + Net Fixed Assets)
- 3Combines both ranks to find cheap, high-quality businesses
- 4Mechanical system - removes emotion from investing
Selection Criteria
Criteria derived from Joel Greenblatt's published writings and investment principles.
Top 10 UK Equities - Joel Greenblatt Strategy
Ranked by Joel Greenblatt's Magic Formula combining earnings yield and return on capital.
| # | Ticker | Company | Sector | Mkt Cap | MF Rank | Score | Verdict |
|---|---|---|---|---|---|---|---|
| 1 | GNS | Genus PLC | Biotechnology | $2.0bn | 1 | 100.0 | BUY list – Magic Formula top 30 |
| 2 | MONY | Mony Group PLC | Interactive Media & Services | $1.3bn | 2 | 99.6 | BUY list – Magic Formula top 30 |
| 3 | HOCM | Hochschild Mining PLC | Gold | $3.4bn | 3 | 99.3 | BUY list – Magic Formula top 30 |
| 4 | EDV | Endeavour Mining plc | Gold | $12.7bn | 4 | 98.9 | BUY list – Magic Formula top 30 |
| 5 | GSK | GSK plc | Pharmaceuticals | $97.4bn | 5 | 98.6 | BUY list – Magic Formula top 30 |
| 6 | AUTOA | Autotrader Group PLC | Interactive Media & Services | $5.2bn | 6 | 98.2 | BUY list – Magic Formula top 30 |
| 7 | PFD | Premier Foods PLC | Packaged Foods & Meats | $2.3bn | 7 | 97.8 | BUY list – Magic Formula top 30 |
| 8 | ITV | ITV PLC | Broadcasting | $3.3bn | 8 | 97.5 | BUY list – Magic Formula top 30 |
| 9 | GAMA | Gamma Communications Plc | Alternative Carriers | $1.3bn | 9 | 97.1 | BUY list – Magic Formula top 30 |
| 10 | RMV | Rightmove PLC | Interactive Media & Services | $4.8bn | 10 | 96.8 | BUY list – Magic Formula top 30 |
Genus PLC
Mony Group PLC
Hochschild Mining PLC
Endeavour Mining plc
GSK plc
Autotrader Group PLC
Premier Foods PLC
ITV PLC
Gamma Communications Plc
Rightmove PLC
Disclaimer
This page applies Joel Greenblatt's documented investment philosophy to UK-listed equities. Rankings and scores are illustrative and do not constitute investment advice. Past performance is not indicative of future results. Always conduct your own research before making investment decisions.