About The Deep Value Index (DEEPI)
The Deep Value Index identifies undervalued stocks using The Acquirer’s Multiple®.
The Index is composed of the 100 most undervalued, fundamentally strong stocks listed in the US.
Constituent stocks are selected from the smallest 75% of all stocks by number (equivalent to a market cap smaller than about $2.5 billion).
How it works
Step 1.
The Index identifies potentially undervalued stocks using The Acquirer’s Multiple®.
The initial universe of stocks is valued holistically—assets, earnings, and cash flows are examined—to understand the economic reality of each stock. Each stock is ranked on the basis of such valuation.
Potential components are further evaluated using statistical measures of fraud, earnings manipulation, and financial distress.
Step 2.
Each potential component is examined for a margin of safety in three ways:
(a) a wide discount to a conservative valuation,
(b) a strong, liquid balance sheet, and
(c) a robust business capable of generating free cash flows.
Step 3.
Finally, a forensic-accounting due diligence review of each of the remaining potential components’ financial statements, particularly the notes and management’s discussion and analysis, is undertaken.
The Index is formed from the components passing each stage. Each position will be weighted to about 1% of the Index value.
The Index is reconstituted and rebalanced quarterly.
About The Acquirer’s Multiple®
Constituents
DEEPi Index
| Weight | Name |
|---|---|
| 1.47% | HERBALIFE LTD |
| 1.38% | HERITAGE INSURANCE HOLDINGS INC |
| 1.37% | PAGSEGURO DIGITAL LTD |
| 1.37% | ITURAN LOCATION AND CONTROL |
| 1.33% | IBEX LTD |
| 1.31% | RYERSON HOLDING CORP |
| 1.30% | WORLD ACCEPTANCE CORP |
| 1.30% | HUDSON TECHNOLOGIES INC |
| 1.25% | STURM RUGER & CO INC |
| 1.22% | BW LPG LTD |
| 1.22% | CVR ENERGY INC |
| 1.22% | W&T OFFSHORE INC |
| 1.21% | NU SKIN ENTERPRISES INC |
| 1.20% | SANDRIDGE ENERGY INC |
| 1.20% | INTERNATIONAL GENERAL INSURANCE HOLDINGS LTD |
| 1.20% | IDT CORP-CLASS B |
| 1.19% | SOLAREDGE TECHNOLOGIES INC |
| 1.17% | BANK OF NT BUTTERFIELD & SON |
| 1.17% | TEEKAY CORP |
| 1.16% | MYERS INDUSTRIES INC |
| 1.15% | DANAOS CORP |
| 1.15% | INMODE LTD |
| 1.14% | LINDSAY CORP |
| 1.14% | TEEKAY TANKERS LTD-CLASS A |
| 1.14% | AMN HEALTHCARE SERVICES INC |
| Weight | Name |
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Disclaimer: acquirersmultiple.com is not an investment adviser, brokerage firm, or investment company. “The Acquirer’s Multiple®” is a term used to describe the investment strategy explained in the book Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations. Use of the formula does not guarantee performance or investment success. acquirersmultiple.com is owned in part by Tobias Carlisle.
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