Neff was a contrarian investor buying good companies with moderate growth and high dividends while out of favour, and selling them once they rose to fair value. John Neff wrote: “If you buy stocks when they are out of favor and unloved, and sell them into strength when other investors recognize their merits, you’ll often go home with handsome gains.” During his tenure as manager of Vanguard’s Windsor Fund between 1964 and 1995, Neff’s average annual total return was 13.7%.He was known as the “professional’s professional” because many fund managers entrusted their money to him.
Neff Screen is a value investing strategy based on the rules of successful US fund manager John Neff. It combines demanding value criteria with elements of growth, quality and dividend income. Neff perennially found undervalued, out-of-favor stocks in the bargain basement. He liked stocks with a combination of low price-earnings ratios, solid growth forecasts in earnings and sales growth, and an increasing dividend yield. Neff searched for stocks that were unattractive, and in his words, matched the fund’s “cheapo” profile.