High Alpha is one of the investment advisory services offered by Altimetry Research.
It gives retail investors access to a powerful forensic accounting system that Prof. Joel Litman and his team use to analyze the stock market to find undervalued companies that may be publishing misleading financial reports.
If you’d like to learn more about this, keep reading because, in this review, I walk you through the investment strategy behind it and why Prof. Litman believes companies may be publishing incorrect financial information.
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What is Altimetry’s High Alpha?
High Alpha is an investment research service that is published by a firm called Altimetry Research. It is edited by Prof Joel Litman.
Altimetry Research is a boutique financial research and publishing firm that provides individual investors with investment ideas and analytics. It is the consumer arm of Valens Research, which targets institutional investors.
With High Alpha, the focus is on small-cap stocks with massive potential.
To arrive at the stock recommendations that are sent out to subscribers, it takes a multi-stepped process that starts with Litman’s proprietary tool, the Stock Altimeter.
The Stock Altimeter and its dataset are used to identify a company’s true financial health or performance as opposed to what they publish in their financial reports.
Why does he take this approach?
Prof. Litman believes that there usually are discrepancies between what companies publish in their reports under the Generally Accepted Accounting Principles (GAAP) and their “true” numbers. He even claims to have identified 130 inconsistencies between the “as reported” numbers and the “true” numbers.
Since the “as reported” figures may be misleading, he believes that this results in stocks being incorrectly priced in the market – he seeks to exploit the difference, which is technically called Alpha.
Once the Stock Altimeter (the tool that detects the true value) is put to work, Joel and his team isolate the stocks that have high discrepancies between true and reported earnings because these lead to high alpha or high gains.
The team rebuilds the statements in a uniform format and whittles the list of high-alpha stocks down to roughly 200 companies.
With this list of companies, they run their earnings call forensics on them to boil the list further down to 30 stocks that have huge upside potential. By forensics, he means that they analyze the earnings calls to identify any “deception, evasion, or excitement generated by CFOs and CEOs.” This is not the first time I have encountered this as he talked about it in his presentation of Office Doomsday.
At this point, they have a clue as to the future of a stock’s price.
They then focus on the very small-cap stocks out of the ones they have to find the ones where they see the highest potential upside. After rebuilding their financial statements and analyzing results, they generate one recommendation that they believe can either triple or double your money.
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Who is Prof Joel Litman?
Professor Joel Litman is the chief investment strategist at Altimetry Research. He is the president of Valens Research and also serves on the Board of COL Financial Group, a brokerage firm in Asia.
He is a member of the CFA institute among other bodies and is a Certified Public Accountant (CPA). He has a BS in Accounting from DePaul University and an MBA/MM from the Kellogg Graduate School of Management at Northwestern University. He has worked for companies like Credit Suisse, PwC, Deloitte, and American Express.
He has taught or guest lectured at a couple of well-known institutions like Harvard Business Schoo, Wharton, just to mention a few.
He has been on CNBC, published in Harvard Business Review, and worked as a contributor to Seeking Alpha. He co-authored a book called Driven: Business Strategy, Human Actions, and the Creation of Wealth.
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What you get when you join Altimetry’s High Alpha
When you sign up for Altimetry’s High Alpha, you receive small-cap stock recommendations every month on the third Monday of the month. Prof. Litman also gives his predictions, warnings, and forensic analysis.
You also receive important updates that include information on when to close each position.
The team also publishes the discrepancies that they have uncovered and the excitement or deception markers that they’ve seen in their earnings call forensics.
You also receive a free copy of a research report named The Investment Truth Detector: How to Analyze Any Stock for Hidden Gains of 100% to 500%. In the report, Prof. Litman walks you through his investment strategy and shows you how his “truth detecting system” works on 32,000 stocks.
How much do you pay to join Altimetry’s High Alpha?
If you sign up through one of the presentations pitching it, the one-year subscription fee is $3,000, or sometimes $2,500 depending on the discount.
Does Altimetry’s High Alpha have a Refund Policy?
There are no cash refunds. If you cancel your subscription within the stipulated period (30 days in most cases), they give you credit to use on any other research service provided by Altimetry.
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Closing Remarks on Altimetry’s High Alpha
Altimetry’s High Alpha is an investment advisory service that makes use of Litman’s Altimeter tool. Although he uses this tool for his other services, where he focuses on small-cap stocks. For example, in one of his presentations pitching the newsletter, he talks about two US-based cannabis companies that he thinks are severely undervalued by the market and are likely to soar as their true value comes to the fore.
Joel’s approach here is based on forensic accounting, which is interesting and unique. However, that shouldn’t distract you from the fact that he is recommending small-cap stocks, which can be very risky no matter how you analyze them.
Bear this in mind as you decide whether you are going to sign up for a newsletter that costs more than $2,000 per year non-refundable.
Before you go…
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