What Is It?

The Acquirer's Multiple is a proven contrarian investment strategy that's particularly well-suited to long-term investors. By taking an organized, disciplined, and unemotional approach to investing, the method helps identify deeply undervalued stocks that can be held for one year to see a regression to the mean.

In his book, "The Acquirer's Multiple: How the Billionaire Contrarians of Deep Value Beat the Market," Tobias Carlisle describes this powerful investment method. With a track record of success, the strategy would have delivered an average annual return of 18.6% between 1973 and 2017, compared to just 10.2% per year for the S&P500.Check out the book to learn more.

In Practice

  1. Go to The Acquirer's Multiple Investing website
    1. Create an account
    2. Go to the Stock Screener* (only the Large Cap 1000 Screener is free)
  2. Compose your portfolio
    1. Buy X number of stocks with the lowest Acquirer's Multiple scores every Y months.
    2. E.g., Cumulus Capital Management buys three stocks with equal-dollar amounts every single month.
    3. E.g., You can also buy 20 stocks every year.
  3. Hold these stocks for one year, no matter what.
    1. Do not panic sell, do not take premature profits.
    2. Only sell after one year if the stock is not on the list anymore.
    3. Depending on the Capital Gains laws in your country and for tax purposes, keep winners for more than one year, and sell losers before the one-year mark.
  4. Repeat the previous steps every Y months according to your strategy.
* You might want to filter out Companies you do not want to invest in for personal reasons.
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The Acquirer's Multiple formula

The Acquirer's Multiple Score is calculated based on the ratio of

  • Enterprise Value
  • Operating Earnings

The Enterprise Value is equal to

  • Market capitalization
  • + Debt
  • - Cash

The Operating Earnings are equal to

  • Revenue
  • - the cost of goods sold
  • - selling, general & admin costs
  • - depreciation & amortization
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