The Alpha Algorithm Heads to Silicon Valley

Founded in 1982 and headquartered in San Jose, California, Adobe Systems, Inc. (ADBE) provides graphic design, publishing and imaging software for Web and print production. The company licenses its industry-standard technologies to major hardware manufacturers, software developers and service providers, in addition to offering integrated software solutions to businesses of all sizes.

Adobe Systems, Inc. (ADBE) versus the S&P 500 year to date.

Eight Top Investment Strategies Betting on Adobe Systems, Inc. (ADBE)

1. Momentum Factor

The stock is one of the top 120 large- and mid-cap U.S. stocks exhibiting relatively higher price momentum, as measured by a specific factor which has historically driven a significant part of companies’ risk and return.

2. Capital Strength

The stock is part of a strategy that seeks to outperform the market by selecting companies based on the strength of their balance sheets, long-term debt ratios and return on assets (ROA).

3. Large-Cap Momentum

The stock is part of a major hedge fund’s systematic strategy that invests in large- and mid-cap U.S. companies with positive momentum and that rank in the top third of total return over the prior 12 months, excluding the last month.

4. Large-Cap Alpha Core

The stock is part of a tiered, equal-weighted index of large-cap stocks selected from the S&P 500 that are expected to outperform the broader large-cap space based on an intricate methodology of ranking stocks according to their recent performance.

5. Large-Cap Growth

The stock is among the top 50 large-capitalization U.S. growth stocks generated through a rigorous 10-factor fundamental screening process.

6. Pure Growth

Adobe is part of a strategy that selects companies from the S&P 500 Index based on three growth factors: current internal growth rate, historical earnings per share (EPS) growth and historical sales/share growth.

7. Large-Cap Alpha Growth

Adobe has been chosen as part of an alpha-seeking index that selects and weights growth stocks from the S&P 500 Growth Index. The proprietary methodology uses price appreciation — among more traditional factors — and weights the constituents based on their respective growth scores.

8. Knowledge Leaders

The stock benefits from the “knowledge effect” — the tendency of innovative companies to outperform, and is selected by adjusting historical financial statements to obtain its level of “knowledge capital.”

Recommendation

Buy Adobe Systems, Inc. (ADBE) at market today and place your stop at $121.00.

I am holding off on recommending options for now.

Portfolio Update

Sincerely,

Nicholas A. Vardy