Halls of Shrewd'm / US Policy
No. of Recommendations: 5
Many growth stalwarts are plunging as their growth expectations are being revised downwards. They have traded at PEs at least in the high 20s, but are falling rapidly. Share prices of most at 5-year or longer lows. Very rare for so many of these high quality growth companies to be marked down at the same time in an expensive market.
Constellation Software on retirement of founder CEO and potential AI threats.
Novo Nordisk on newer GLP1 drugs being inferior to Lilly’s and pressure to cut US prices.
Zoetis on new competition and side effects of a new drug.
Copart on new competitor gaining share.
Lululemon on new competitors gaining share and slowing innovation and new products.
All these companies were number 1 or 2 in their segment with very strong moats, strong balance sheets and high returns on capital.
Some like NVO and LULU are already cheap on a PE basis. Others probably not yet cheap enough to attract value investors.
I have sold put options on LULU and NVO. Others are on my watchlist waiting for year end capital loss selling to end.
Do you have positions on any of them?
No. of Recommendations: 6
I was looking at NVO today. I think it's probably cheap? However, some things trouble me.
1) An effective oral competitor for weight loss could shred about 50% of their revenue in less than a year. NVO is not cheap at all if that happens. It's a lot easier to manufacture, distribute and persuade people to try a pill instead of a jab.
2) The Trump Factor, it's not a small risk to invest in non-US pharma. Not just tariffs, but also Trump's claim he intends to push prices down.
3) IIRC 28% withholding tax on Danish dividends? For anyone buying Novo Nordisk ADR on the US market and living outside the US, a further 15-30% tax from the US too.
Adjusting the P/E a bit to account for the pain and suffering involved in getting dividends, it doesn't seem quite so cheap.
4) Failure of their product to help Alzheimers feels vaguely troubling, given the association of Alzheimers and diabetes. Occasionally you get a medicine that e.g. gives people great numbers on their bloodwork or whatever(e.g. fibrates) but it doesn't actually help that much in the end.
I guess it depends if it's a long term hold, or a short term trading position, that you have in mind e.g. dividends here are fairly inefficient vs capital gains.
TRS
No. of Recommendations: 2
I thought I was going to sit in cash but I've found quite a few companies of interest trading at attractive valuations and 5 and 10 year lows. More diversified than usual in 10-12 stocks presently.
UK, US and China with roughly a third in each region.
Everyone is watching Invidia, Alphabet the Nasdaq / S&P500. If you look elsewhere there's opportunity a plenty.
Happy days!
No. of Recommendations: 9
No. of Recommendations: 0
Definitely, also some interesting discussion on the index board under *most recommended*
No. of Recommendations: 0
the problem with finviz is that it is not clear how to further filter prospects. help?
e.g., AQR basically next sorts for 'economic footprints' relative to mkt cap.
and then one could obviously look at fwd projections, and\or more recent trends.
(all screeners have their own issues, but i actually like and use finviz often)
No. of Recommendations: 1
I look visually at the heatmap for sectors that are showing up cheap, then run a screener on those specific sectors in the screener tool.
No. of Recommendations: 18
Here's a map of the Russell 2000 where everything that's below the price it had 10 years ago is shown in red. There's plenty to pick through: ...Nice link, thanks. I've used their site before, but never thought of using it that way.
Another way I've used in the past to find inspirations: look at a list of stocks sorted by [ (book per share growth in the least 5 or 10 years) - (total return in the last 5 or 10 years) ]. It's a quick way to find the list of firms whose stock returns have been much worse than their business results, the "hiding in plain site" deals. You can use earnings per share instead of book per share, but it's more volatile so you need more checking after the screening.
Of course you have to skip anything that was unrealistically expensive at the beginning of the time period, but it's a nice filter. This sort put me into Walmart around 2012, for example, when the business had been doing wonderfully for a decade but the price had gone nowhere and the consensus was that it was dead money. Made a bundle.
Jim
PS, here is a recent list from the Value Line 1700 set of firms.
Highest difference of 5-year total return (bad) and book value growth (good), limited to those firms with a currently positive ROE.
There might be something worthwhile in the list, for those who like to be contrarian.
Ticker Symbol Return on Shareholders Equity Book Value Growth 5-Year Total Return 5-Year
SMLR 17.72 80.5 -24.56
ZYXI 8.38 35.5 -47.6
ZM 9.68 53.5 -29.16
ENPH 12.32 55 -27.41
XYZ 0.05 60 -20.57
TOPS 3.3 23.5 -52.26
AMD 9.41 89 19.47
SE 5.3 62 -6.48
EGRX 15.26 10.5 -55.89
CABO 0.8 19 -44.24
CARM 216.69 -1.5 -62.59
EXPI 5.97 46 -14.82
FRPT 4.44 43.5 -17.21
FIVN 29.78 25.5 -34.6
CXDO 3.26 58 -1.65
SLP 5.45 37 -21.99
FOXF 0.54 27 -30.48
UPS 39.56 49 -7.39
MED 0.99 14 -41.85
ACMR 11.45 59 3.42
EHTH 1.75 9 -46.35
CROX 42.91 60 5.08
MCO 57.72 67.5 12.58
INVA 3.38 68 14.08
KRNT 1.39 22.5 -31.05
TTD 13.32 39 -14.25
GTBIF 2.13 28 -22.4
FVRR 5.03 13.5 -36.47
TWLO 7.8 33 -16.81
HGBL 7.94 45 -4.36
HELE 9.91 10.5 -38.66
PAYC 29.31 33 -16.15
AMCX 22.95 25.5 -23.21
APVO 39.02 -45 -93.69
ALGN 12.25 27 -21.53
AIFU 13.54 -8.5 -56.66
OEC 17.42 26.5 -21.37
MTLS 2.84 14 -33.31
AZTA 0.81 31.5 -14.79
PDD 32.05 41.5 -4.68
CLVT 10.22 10 -34.56
VCYT 2.05 40 -4.51
FMC 9.72 9 -34.03
BLMN 115.63 26.5 -16.31
POOL 34.1 36 -6.41
CRMT 3.14 13 -28.97
UI 106.53 59 17.14
CE 13.76 20 -21.72
ATKR 30.7 53.5 11.83
ASPN 5.08 16 -24.15
SAM 6.51 13 -27.12
LGIH 9.62 23 -16.63
DXCM 26.17 33.5 -5.85
BIO 3.95 27.5 -11.84
MBUU 5.99 23.5 -15.44
FORR 12.24 8 -30.79
PAGS 14.42 13 -25.72
SCNI 142.26 -30.5 -69.21
LMT 84.25 46.5 7.85
ICLR 12.21 34 -3.57
PCRX 3.79 18 -19.21
TSLA 9.77 56.5 19.35
GTN 9.82 15.5 -21.03
MGPI 13.78 25.5 -11.03
SITE 7.86 34.5 -1.88
APT 6.31 17.5 -18.47
WB 8.63 13 -22.89
OFLX 21.67 8 -27.86
MKTX 19.74 14.5 -20.74
EGAN 39.95 34 -1.14
ANGI 3.38 -3 -38.07
INMD 25.75 26.5 -8.56
OMI 6.25 -0.5 -35.49
XPEL 20.17 38 3.04
LOVE 5.34 18 -16.9
RILY 182.35 6.5 -28.3
CP 7.76 36 1.52
BF/B 21.76 17 -17.45
PCTY 20.01 28.5 -5.88
GNRC 12.68 25.5 -8.86
USNA 7.89 10 -24.36
KOP 10.72 35.5 1.17
MCFT 5.84 29 -5.14
IART 12.74 6.5 -27.33
SAFE 4.51 15.5 -18.19
TREX 26.63 17 -16.61
PGNY 12.87 29.5 -4.02
LULU 41.96 19.5 -13.78
ULH 20.07 24.5 -8.73
AUDC 14.22 14.5 -18.7
KZIA 267.33 -24 -57.14
KDOZF 4.45 20.5 -12.6
MHH 3.89 17.5 -15.29
TBCH 13.41 25.5 -7.19
LAD 12.05 33.5 1.05
EPAM 17.35 20 -12.13
SLQT 8.26 -10 -42.13
LX 10.24 19 -12.92
SIEB 15.8 27.5 -4.34
KMX 8.01 13 -18.73
No. of Recommendations: 1
I am surprised that there aren’t a few more food, beverage and FMCG companies, e.g., STZ, DEO, BUD, Nestle, PEP, CLX
Maybe Value Line doesn’t cover ADRs.
No. of Recommendations: 2
LULU has my attention (purchased a small amount a few months ago); it breaks a key rule "don't invest in retailers"; but the numbers are pretty compelling.
Ticker Symbol Return on Shareholders Equity Book Value Growth 5-Year Total Return 5-Year
LULU 41.96 19.5 -13.78
Some of the other names on that list are crazy, SCNI - down 99% from the ATH for example.
tecmo
...
No. of Recommendations: 3
I had a good look round a LULU store for the first time in October at T5 Heathrow before a flight departure, the staff were excellent, garments of high quality and the store had excellent design and layout. I can see why they are successful and bought some of the stock.
No. of Recommendations: 2
Investing in retailers is tricky, however there's some great ones out there imo, the best ones survive and thrive and have to be on their game nowadays to compete with online retail.
Its numbers and scuttlebutt driven for me, same for anything food related (eg Greggs) I love walking round shops looking at the merchandise, layouts, product and prices and making comparisons. If you've read Sam Waltons book "Made in America" you'll know what I mean.
The retail environment is very competitive in the UK and only the strongest survive.
No. of Recommendations: 5
I've had Zoetis for a long time as part of my "expensive pet care" thesis. Not planning on adding any more at the instant, but def not selling. I just added Constellation to the holdings and the plan is to hold it until I need to start selling stuff to pay for my Panda Express lunches.
