Three Stocks to Consider from Seeking Alpha’s Quant Portfolio

Seeking Alpha’s quant system has identified three stocks for investors to consider: **Kinross Gold (KGC)**, **CommScope Holding (COMM)**, and **SSR Mining (SSRM)**. This selection, derived from Seeking Alpha’s GARP-plus strategy, has seen significant performance, with the **Alpha Picks** portfolio up **240%** and the **Pro Quant Portfolio** up **40%** since launching in **July 2022**.

The quant system evaluates over **5,000 stocks**, focusing on value, growth, profitability, momentum, and earnings per share (EPS) revisions. This data-driven approach has consistently outperformed the **S&P 500** since **2010**, showcasing its effectiveness in identifying potential investment opportunities.

Understanding the Quantitative Strategy

At the helm of this quant initiative is **Steven Cress**, Head of Quant at Seeking Alpha. Cress emphasizes that the quant system is akin to traditional fundamental analysis, but with a broader scope. Instead of examining individual companies, the system assesses thousands simultaneously, using mathematical algorithms to highlight strong investment candidates.

Cress describes the approach as **GARP-plus**, which stands for growth at a reasonable price. This methodology enables the team to identify stocks that exhibit a combination of robust growth potential and reasonable valuations. Cress notes, “We look at stocks that are collectively strong on value, growth, profitability, momentum, and EPS revisions.”

The quant system distinguishes itself by comparing each company’s metrics to those of its industry peers. This relative analysis helps to sort out strong performers from weaker ones, providing investors with critical insights into market dynamics.

Diving into the Stock Picks

Among the highlighted stocks, **Kinross Gold** stands out due to its strong performance. Over the past year, its stock price has surged **140%**. Despite this increase, Cress notes that the valuation remains favorable. The stock currently holds a **C- grade** in valuation, indicating it is neither overvalued nor undervalued compared to its sector peers.

In terms of profitability, Kinross Gold has an **A+ grade**, with a gross profit margin of **62%** compared to the **29%** sector average. This solid performance is attributed to the rising price of gold, making companies engaged in gold extraction profitable.

**CommScope Holding** represents a shift to the information technology sector. This company has exhibited a solid upward trajectory, with a value grade of **B** and a growth grade of **B**. Its profitability grade is **B+**, showcasing its ability to thrive in a rapidly growing market, particularly in data center infrastructure.

Lastly, **SSR Mining** has shown remarkable growth, with its stock price climbing **272%** over the past year. It maintains an **A+ grade** in growth, with analysts projecting a **92%** forward growth rate. The company’s valuation remains appealing, with a forward price-to-earnings ratio of **14 times**, compared to the sector average of **16 times**.

Cress emphasizes the importance of combining growth and value metrics in investment decisions. He highlights the **PEG ratio** as a crucial tool, allowing investors to assess a company’s growth potential alongside its valuation. This metric has proven particularly useful in current market conditions, where valuations can fluctuate significantly.

Investors looking for more information on these stocks can access detailed analyses through Seeking Alpha’s premium platform, where they can find comprehensive performance metrics and investment recommendations. The transparency of the platform allows subscribers to track the performance of quantitative strategies effectively.

In an ever-changing market landscape, Cress advises sticking to a diversified strategy that encompasses value, growth, profitability, momentum, and EPS revisions. His insights suggest that by focusing on these core factors, investors can navigate market volatility and identify promising investment opportunities.