Here's how Joel Greenblatt makes 'lots of money'

Designer Michael Kors

Editor's note: This is Pro Strategy, a column on how to use the philosophies of the smartest minds on Wall Street to generate quality investment ideas.

Michael Kors, a former growth stock darling, is still down over 40 percent from its 2014 highs. Is the luxury goods maker a has-been or is this decline an opportunity? Using a legendary hedge fund manager's investing framework may give us the answer.

Joel Greenblatt is one of the most respected value investors in the industry, generating a stunning long-term investment track record. The firm he founded, Gotham Capital, reportedly had annual returns of 40 percent from 1985 to 2005.

CNBC Pro evaluated Michael Kors using the investment strategy Greenblatt teaches in his "Value and Special Situation Investing" class at Columbia Business School. Comments from a leading Wall Street retail analyst and David Einhorn's hedge fund investor letter also shaped this outlook.

Good companies that are cheap

"Buying good businesses at bargain prices is the secret to making lots of money." — Joel Greenblatt

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