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
Weight | Name |
|---|---|
| 1.55% | Atkore International Group Inc |
| 1.27% | Centrus Energy Corp |
| 1.27% | SkyWest Inc |
| 1.22% | Cactus Inc |
| 1.21% | Gray Television Inc. |
| 1.17% | Interface Inc |
| 1.16% | Primoris Services Corp |
| 1.16% | Graftech International Ltd |
| 1.16% | DXP Enterprises Inc |
| 1.16% | ACCO Brands Corp |
| 1.15% | Biglari Holdings Inc |
| 1.14% | Albany International Corp. |
| 1.13% | Berkshire Hills Bancorp Inc |
| 1.12% | Eagle Bancorp Inc |
| 1.12% | IDT Corp |
| 1.11% | The ODP Corporation |
| 1.11% | ScanSource Inc |
| 1.09% | Green Brick Partners Inc |
| 1.09% | Financial Institutions Inc |
| 1.08% | SunCoke Energy Inc |
| 1.07% | International Seaways Inc |
| 1.06% | Genworth Financial Inc |
| 1.06% | MYR Group Inc |
| 1.06% | International Bancshares Corp |
| 1.06% | TrueBlue Inc |
| 1.06% | Vectrus Inc |
| 1.06% | Warrior Met Coal Inc |
| 1.05% | Donnelley Financial Solutions Inc |
| 1.05% | Cathay General Bancorp |
| 1.05% | Bridge Bancorp Inc |
| 1.05% | Photronics Inc |
| 1.04% | Meridian Bancorp Inc |
| 1.04% | American National Group Inc |
| 1.04% | Matrix Service Co |
| 1.04% | Solaris Oilfield Infrastructure Inc |
| 1.03% | Hope Bancorp Inc |
| 1.03% | TriState Capital Holdings Inc |
| 1.02% | Simmons First National Corp |
| 1.02% | First Bancshares Inc (The)/MS |
| 1.02% | Flagstar Bancorp Inc |
| 1.01% | Central Pacific Financial Corp. |
| 1.01% | Kelly Services Inc. |
| 1.01% | Hanmi Financial Corp |
| 1.00% | Koppers Holdings Inc |
| 1.00% | Golden Ocean Group Ltd |
| 0.99% | First Busey Corp |
| 0.99% | Methode Electronics Inc |
| 0.99% | Titan Machinery Inc |
| 0.99% | TriCo Bancshares |
| 0.99% | Great Southern Bancorp Inc |
| 0.99% | Kforce Inc |
| 0.98% | Barrett Business Services Inc |
| 0.98% | GEO Group Inc (The) |
| 0.98% | Enterprise Financial Services Corp |
| 0.98% | Mueller Industries Inc. |
| 0.97% | Costamare Inc |
| 0.97% | Boise Cascade Co |
| 0.97% | Steelcase Inc. |
| 0.97% | Oppenheimer Holdings Inc |
| 0.97% | Resources Connection Inc |
| 0.96% | 1st Source Corp |
| 0.96% | Stonex Group Inc |
| 0.96% | Universal Corp |
| 0.96% | First Financial Corp/IN |
| 0.96% | Miller Industries Inc/TN |
| 0.95% | Community Trust Bancorp Inc |
| 0.95% | First of Long Island Corp (The) |
| 0.94% | Encore Wire Corp |
| 0.94% | Rent-A-Center Inc |
| 0.93% | Powell Industries Inc |
| 0.93% | Apogee Enterprises Inc |
| 0.93% | Diamond Hill Investment Group Inc |
| 0.93% | Kimball International Inc |
| 0.93% | Hawkins Inc |
| 0.92% | First Community Bancshares Inc |
| 0.92% | HNI Corp |
| 0.92% | National Presto Industries Inc. |
| 0.91% | M/I Homes Inc |
| 0.91% | CNB Financial Corp/PA |
| 0.91% | Core Mark Holding Co Inc |
| 0.91% | Seneca Foods Corp. |
| 0.91% | Safety Insurance Group Inc |
| 0.90% | CURO Group Holdings Corp |
| 0.90% | DHT Holdings Inc |
| 0.89% | Schweitzer-Mauduit Intl Inc |
| 0.89% | National Western Life Group Inc |
| 0.88% | Atlantic Power Corp |
| 0.88% | Ennis Inc |
| 0.87% | Standard Motor Products Inc. |
| 0.87% | Greenhill & Co Inc |
| 0.87% | Great Lakes Dredge & Dock Corp |
| 0.86% | FutureFuel Corp |
| 0.85% | Stewart Information Services Corp |
| 0.84% | PC Connection Inc |
| 0.83% | PJT Partners Inc |
| 0.83% | Employers Holdings Inc |
| 0.82% | National Healthcare Corp. |
| 0.81% | AMERISAFE Inc |
| 0.81% | Northwest Pipe Co |
| 0.76% | IAMGold Corp |
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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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