New Stocks In The Magic Formula Lists This Week

By Steve Alexander of MagicDiligence

Sunday, November 15, 2015 7:58 PM EDT

As earnings season continues, we continue to get substantial turnover in the Magic Formula screens we follow.

A few names in particular stand out here. First is Madison Square Garden Networks (MSGN), which is a recent spinoff from Madison Square Garden (MSG). Essentially, MSG spun off their cable networks into MSGN, while keeping all of the other businesses including the sports teams (Knicks, Rangers) and venues (MSG itself, Radio City Music Hall, and others). Joel Greenblatt's love for spinoffs is something he wrote about in You Can Be A Stock Market Genius, and indeed MSGN is trading well below the analyst consensus target in the mid-$30's.

A second interesting new name is F5 Networks (FFIV), which makes a variety of data center networking components. FFIV passes all of the quick tests, with a 5-year compound revenue growth rate of 17% (19% earnings), no debt, share buybacks, and outstanding 5 and 10-year return on capital figures. Trading right near its 52-week low, the stock looks ripe for closer research.

Finally, we have Polaris (PII), the expertly run maker of ATVs, motorcycles, and other small vehicles. We recently posted a detailed look at Polaris, liking it so much that it was added to our Top Buy list of Magic Formula picks.

Here are the full lists:

Entering the 50 over 50 million screen:

Cherokee, Inc. (CHKE )
Gilead Sciences Inc (GILD)
MSG Networks Inc (MSGN)
Qualcomm Inc. (QCOM)

Dropping out of the 50 over 50 million screen:

Discovery Communications Inc (DISCA )
Iconix Brand Group Inc (ICON )
Interval Leisure Group Inc (IILG)
Starz (STRZA)

Entering the 50 over 1 billion screen:

Crane Co. (CR)
F5 Networks Inc (FFIV)
Foot Locker Inc. (FL)
Gilead Sciences Inc (GILD)
MSG Networks Inc (MSGN)
Polaris Industries Inc (PII)
Western Digital Corp (WDC)
Western Refining Inc (WNR )