Summary
- The Piotroski-Graham Enhanced Value strategy has outperformed the S&P 500, returning +586.7% since 2018 vs. +192.2%, even before accounting for dividends.
- July 2026 portfolio selections combine high Piotroski F-Scores, deep Graham Number discounts, and Beneish M-Score screens for robust value and financial health.
- EXE and MOMO exemplify the model: EXE trades at a 77% discount to Graham Number with energy tailwinds; MOMO trades at a 106% discount, strong fundamentals, and low sentiment.
- Integrating Momentum Gauge signals can further enhance returns and reduce drawdowns, especially during extended market downturns or growth stock dominance.
- A rotation into value stocks, potentially fueled by macroeconomic shifts or technical overbought levels of growth stocks, could further benefit these highly ranked selections for years to come.
Introduction
“The intelligent investor is a realist who sells to optimists and buys from pessimists.” ~ Benjamin Graham
I have spent the last 35 years trading, researching, and constructing algorithms to identify and leverage the value across fundamental, technical, and behavioral finance models. Of the 10 portfolio models designed for optimal portfolio mixes for members to beat the market at Value & Momentum Breakouts, eight come from enhancing well-tested anomaly research in published financial journals.
If you believe, like I do, that there’s much more to stock trading than just buy, hold, and hope that every future event works out perfectly as promised for your stock – then these trading models are for you. This article highlights the importance of timing and reveals stocks from our top portfolios that may weather the record rotation likely to come from the most skewed markets in over 20 years.
The stock market has spent much of 2026 obsessing over AI valuations, rate expectations, and geopolitical noise. Meanwhile, a quiet class of deeply undervalued companies consistently passes rigorous financial tests thrown at it — and delivers strong, consistent returns.
That’s exactly how the Piotroski-Graham enhanced value approach is supposed to work.
Now in its 30th portfolio live tested on Seeking Alpha since 2017, this semi-annual portfolio model combines two of the most thoroughly tested frameworks in academic finance: Joseph Piotroski’s F-Score — which measures financial health across nine fundamental signals — and Benjamin Graham’s classic value formula, which flags stocks trading at deep discounts to their intrinsic worth. Combined with our regular enhancements, they’re cheap and reliably sound, with no red flags from the Beneish M-Score earnings manipulation screen.
When the Model Underperforms / What to Watch
First, it is important to recognize that no model wins in all environments. The Piotroski-Graham approach underperforms during periods of growth stock dominance, geopolitical shocks that overwhelm fundamentals, and extended value cycles as detailed below from our testing.
However, the long-term results show the Piotroski – Graham model continues as one of our top portfolios, delivering better than 26.3% CAGR since 2018, not including dividends and no negative years for the January portfolio.
The Two Academic Giants Behind the Model
The Piotroski-Graham enhanced portfolio is not a tip sheet — it’s the product of two of the most rigorously peer-reviewed frameworks in value investing history. Joseph Piotroski’s nine-point F-Score, published in the Journal of Accounting Research in 2000, identifies financially healthy companies from a pool of cheap stocks. Benjamin Graham’s formula ensures those companies trade at meaningful discounts to intrinsic worth.
