HOLT
ST
(Monkey, 31
Points)
on 9/26/07 at 6:45pm
Has anyone here ever used HOLT or have any thoughts/opinions on HOLT as a buyside tool?
Thx,
D





terrific, consistent WR
he's a starter in all formats.
Yes and Yes
It's just a glorified DCF designed to keep the inputs honest.
My opinion of it as a buyside tool is it is only valuable if you have a very long time horizon, which eliminates hedge funds and all but the biggest long-only guys.
glorified or enhanced?
I have spoken with a number of users, not all with just 3 - 5 year investment horizons, who find value in the tool in trading...
Any other members of this board who have used HOLT with success?
What's your position?
Are you considering an offer to be a HOLT salesman? Or are you on the buyside considering whether you want to take up the service? If the latter, then try it for yourself - it won't cost you anything but your time investment in learning the software.
Dismiss my comment if you want but think about the methodology behind HOLT (or CROCI, Quest or any other CFROI methodology) and you cannot make it anything but a long-range tool. Some people find it useful as a data-mining or screening tool but that is not its raison d'etre.
Good Product
I interned at CS HOLT. The valuation methodolgy in itself is very intuitive and just makes sense to those who understand accounting. The basic principal is that HOLT takes data (company financial information), scrubs it clean, spits it through a DCF-based valuation analysis. When I say 'scrub', I mean things like adjusting for non-recurring items, capitalizing leases and R&D costs, etc. (can get into more detail if someone is really interested). There are serious money managers, from pension funds guys to hedge funds to bank prop desks, who actually do use the product as an integral part of their investment process. Its not just value guys - there are quants who buy HOLT data to feed into their models. That being said, it is definitely more useful when looking at companies with the ability to generate earnings as their main value, rather than a company worth money for its intelectual property or future growth prospects.
The cool thing about HOLT is you can insert a ticker into the software (Valuesearch) and come up with a screen that really gives you a good idea of company performed over the past 20 years, how their strategy of seeking high rates of return vs absolute growth has been rewarded by the stock market, and how the model values the company. You can then go deeper and see why it is valuaing it that way, and tweak projections as you see fit.
The main value of HOLT as a franchise is not necessarily the equations that spit out a value for a company. If you were so inlclined and knew your way around a 10-k, you could probably create an excel model to replicate what HOLT does in half a workday. What you wouldn't be able to do is replicate the data-scrubing process for all the companies HOLT has in its database (close to 20,000 globally I believe, with data going back as far as the 1950s). That is why it doesn't have much in the way of competition - its too difficult (read - expensive) to replicate.
I think bottom line is that it is useful if it fits your investment style and you take the time to really understand the model. Its not going to spit out correct predictions for you all the time - you still have to do the research and make your own assuptions. It is an investment tool, just like technical analysis, that can be used to improve your investment process.
I swear I don't work there anymore, know that kind of sounded like an advertisement, but those are my thouhts. Hope it helps.