How do you navigate the current turbulence of global uncertainty and the resulting uncertainty on Wall Street? One often-tried technique is to mimic the moves of successful investors.

Robert Shiller, an economist at Yale University, has pointed out that many people try to mirror the strategies of investors such as Warren Buffett. The problem is that by not understanding exactly how someone makes decisions, you cannot fully duplicate the process.

A 2008 study by Gerald S. Martin of American University and John Puthenpurackal of the University of Nevada, Las Vegas, showed when SEC filings revealed changes in the Berkshire Hathaway portfolio, the stock prices of any newly acquired companies had an abnormal one-day increase, averaging 4%.

But wait. A paper by R. David McLean of Georgetown University and Jeffrey Pontiff of Boston College pointed out that the effectiveness of investing strategies diminishes after their publication.

The researchers learned that while the strategies outperformed the market, their success decreased by more than 50% after publication.

A follow-up paper indicated that the one-day positive surprises on firms' earnings announcements accounted for virtually all the ongoing outperformance. Why? Probably because forward projections of corporate earnings are often erroneous.

Now I have you totally confused as to what you should do. The key of course is to find companies with a few basic parameters and then do your own research. Now, I know that always looking for stocks with increasing dividends and an intrinsic value above the share price can get dull after a while. How about something a little more exciting.

OK, here is an investment idea that does not pay dividends and whose share price is currently above its intrinsic value. What that means is either you wait for a pullback in share price, likely, or take the risk that the price appreciation will continue — but for how long is the question.

The company is IDEXX Laboratories (IDXX) and it is currently trading at about $245 per share. The company has come to my attention on several occasions because its line of work. Note that my own menagerie encompasses multiple horses, donkeys, dogs and cats...not to mention three goats and a parrot.

IDEXX is a medical equipment and services player operating in the animal veterinary space. The company's strong fundamentals, excellent revenue growth, profitability, and a decent first quarter have resulted in the shares rising significantly.

The valuation multiples are well above industry peers and the shares are overvalued. However, there is always the possibility the share price will correct over the next six months.

So, why is Wall Street so enthralled with IDEXX? To start, earnings have been increasing at the rate of 16% per year over the last decade. This strong growth is likely to continue for some time.

The company operates with high profit margins and strong returns on equity. Over the last decade the company's profit margins have increased from 11% up to 17%, and the company's return on equity averages over 20%.

The company's long-term debt is about 46% of its total asset value. The company's total liabilities represent 97% of its total asset value, which means that the company essentially owes as much as it owns.

The company also has a history of declining working capital levels, meaning that its short-term assets (such as cash and deposits) just covers its short-term liabilities (bills the company must pay).

IDEXX Laboratories' P/E on a trailing 12-month basis is 55.67. In summary, the shares are expensive, and its book value multiple is unusually high due to its low equity as a result of its significant liabilities.

Do I like the company? Yes, I do. But only if there is a pullback in the share price. The intrinsic value is about 80% of the current share price, versus a preferred 110%. Nonetheless, my projected earnings number for this year is $4.75, as compared to $4.26 in 2018, with a projected share price of $260, or about 6% above where the shares are currently trading.
