Joel Greenblatt's Magic Formula Style 

Our screens are based on iconic investors and their preferred investing criteria.

Who is Joel Greenblatt? - The Founder of Gotham Capital, author of "The little book that beats the market"
In 1985, Joel Greenblatt started Gotham Capital with $7m. Over the next 21 years, he went on to achieve impressive annualised returns of over 40%. In 2005, he wrote The little book that beats the market in which he outlines his Magic Formula, an approach to buying and selling shares.

What rules do we use? - Companies listed in the UK with: 
No Finance/Insurance/Utilities, P/E>5 | EBIT/(Net Fixed Assets + Net Working Capital), high to low | EBIT/EV ranked highest to lowest


Joel Greenblatt

Greenblatt had annualised returns of 40% for 21 years. In his book, he outlines his Magic Formula.

Listed in the UK, no Finance, Insurance, or Utilities, P/E >5 | EBIT/(Net Fixed Assets + Net Working Capital) high to low, EBIT/EV ranked

Latest Content

N+1 Singer - Cello Group - Outlook getting brighter – watch Pulsar

  • 22 Mar 17

Profits are in-line and dividends are up sharply in line with the new pay-out ratio. This is of no surprise given the January trading update. The outlook also appears solid with Health Consulting very strong and Health Research also healthy. In Signal, a slight comparative headwind in H1 (one large non-recurring project) appears to be the only minor negative. The Signal Pulsar social media product, both directly (licence) and indirectly (Pulsar linked project work) has delivered Gross Profit (true revenue) north of £3m and just the UK licence run rate is now £4m. It is clear that licence sales are driving large incremental linked research project boosting Signal more widely. The early signs for the US launch of Pulsar are very positive. With the ability to access (which is restricted) and analyse Facebook data we see a very bright future for Pulsar. Elsewhere within Signal, the Charities business is starting to recover some of the VAT (£300k so far). Cello has been making new highs as investors have backed the business to develop its core Health operation and the news flow on Pulsar has developed. The stock dynamics look very positive, as Cello deploys the £15m of cash raised, earnings will receive a large boost. It seems likely that we will see upgrades driven by this and potentially by upside surprise from Pulsar. With just cash investment in mind there is scope for the shares to exceed 150p. If Pulsar outperforms it could go substantially higher. BUY.


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