Validea Joel Greenblatt Strategy Daily Upgrade Report

Validea’s Earnings Yield Investor model (based on Joel Greenblatt’s Magic Formula) upgraded AMDOCS LTD (DOX) from 0% to 80% and IDT CORP (IDT) from 80% to 90% on a re‑scan of fundamentals and valuation; the model seeks high earnings yields and strong returns on capital. Amdocs — a mid‑cap software and services provider to communications and media companies — registered neutral scores for earnings yield and return on tangible capital and, despite the rating jump to 80%, received a final ranking of “FAIL,” suggesting limited conviction under this strategy. IDT — a small‑cap fintech and cloud communications operator — also showed neutral sub‑scores but moved to a 90% rating and a final “PASS,” indicating stronger interest for inclusion in portfolios following the model's criteria.

Analysis

Validea's Earnings Yield Investor model (based on Joel Greenblatt's Magic Formula) upgraded AMDOCS LTD (DOX) from 0% to 80% and IDT CORP (IDT) from 80% to 90% on a re-scan of fundamentals and valuation; the model flags scores ≥80% as interesting and ≥90% as strong interest. The model targets high earnings yield and return on capital; both tickers registered NEUTRAL on earnings yield and return on tangible capital in the published table, but the aggregate final ranking diverged (DOX: FAIL; IDT: PASS).

Amdocs is characterized as a mid-cap software and services provider for communications and media firms with explicit initiatives in cloud, microservices, automation and GenAI; the move to 80% signals an improvement in either valuation or underlying fundamentals but the final FAIL indicates the combined metrics still fall short of the strategy's threshold. IDT, a small-cap fintech and cloud-communications operator with segments including NRS, BOSS Money and net2phone, reached 90% and a PASS, implying the Magic Formula sees a more attractive earnings-yield/return-on-capital mix despite neutral sub-scores.

Reported sentiment is mildly positive (overall 0.25) with per-ticker sentiment favoring IDT (0.5) over DOX (0.2); key risks include small-cap liquidity for IDT, the limited granularity of the published metrics, and reliance on a single-factor strategy. Investors should therefore treat these model signals as hypothesis-generating prompts for further due diligence—specifically verifying current earnings yield, return on tangible capital, cash flow trends and any recent valuation drivers or one-time items cited in company filings.

Key Decisions for Investors

• For IDT (90% / PASS), consider initiating or adding a modest position after confirming current earnings yield, return on tangible capital and liquidity constraints,
• For Amdocs (80% but FINAL FAIL), defer new large purchases until the company demonstrably improves return on tangible capital or earnings yield metrics or until upcoming quarterly results clarify the valuation change,
• Require primary-source follow-up on free cash flow, recent guidance/analyst revisions and segment profitability (NRS, Fintech, net2phone) for IDT before increasing exposure,
• Apply disciplined position sizing and consider hedging or stop-losses given model limitations, small-cap volatility for IDT and neutral sub-metrics for both names