Warren Buffett is the most famous value investor around.
ADVERTISEMENT
WELLS FARGO: Warren Buffett might like these 9 stocks right now (MO, FL, MU, EQM, BEN, KORS, REGN, URBN, BBBY)
Warren Buffett is the most famous value investor around. Inspired by Buffett, Well Fargo analyst Colleen Hansen listed seven indicators and filtered nine stocks whose fundamentals may look attractive to Buffett.
quires investors to look past the news and instead focus on the fundamentals of a company when deciding where to put their money.
In his 2014 letter to shareholders, Buffett laid out six criteria he applied to measure a company's fundamentals. He said he was normally interested in big companies with at least $75 million of pretax earnings; companies that could demonstrate consistent earning power and were not in need of a turnaround; companies that earned good returns on equity while using little or no debt; companies with strong management already in place; companies with simple business models, rather than those with lots of technologies that are hard to understand; and companies offer clear asking price to be acquired.
Inspired by Buffett, Well Fargo analyst Colleen Hansen listed seven indicators and filtered nine stocks whose look attractive to Buffett.
ADVERTISEMENT
- Five-year average return on equity (ROE) greater than 15%;
- Five-year average return on invested capital (ROIC)
- greater than 15%;
- Debt-to-equity (D/E) less than or equal to 80% of the industry average;
- Five-year average pretax profit margin (PM) 20%
- higher than the industry average;
- Current price-to-earning ratios(P/E) below ten-year historical and industry average P/E ratios(by consensus);
- C
- urrent price-to-book value multiples(P/B) below historical and
- industry multiples;
- Current price-to-cash flow (P/CF)
- ratios below the industry average
Altria
Ticker: (MO)
Sector: Tobacco
5-Year Average ROE: 139.8%
ADVERTISEMENT
5-Year Average ROIC: 37.6%
D/E versusIndustry D/E: 82.5% vs. 184.4%
5-year average pretax PM versus5-year average industry PM: 57.8% vs. 30%
Foot Locker
5-Year Average ROE: 19.2%
ADVERTISEMENT
5-Year Average ROIC: 18.2%
D/E versus Industry D/E: 5% vs.19.5%
5-year average pretax PM versus 5-year average industry PM: 10.6% vs. 6.1%
Micron Technology
ADVERTISEMENT
5-Year Average ROE: 28.4%
5-Year Average ROIC: 19%
D/E versus Industry D/E: 11.7% vs.43.9%
5-year average pretax PM versus 5-year average industry PM: 15.1% vs. 9.6%
ADVERTISEMENT
EQT Midstream Partners
5-Year Average ROE: 29.4%
5-Year Average ROIC: 18.5%
D/E versus Industry D/E: 139.4% vs.216.6%
5-year average pretax PM versus 5-year average industry PM: 66.4% vs. 23.8%
ADVERTISEMENT
Franklin Resources
5-Year Average ROE: 18%
5-Year Average ROIC: 15%
D/E versus Industry D/E: 7.4% vs.164.2%
ADVERTISEMENT
5-year average pretax PM versus 5-year average industry PM: 38.8% vs. 31.1%
Current P/E versus Industry P/E:9.1 vs. 12.2
Michael Kors Holdings
5-Year Average ROE: 38.6%
5-Year Average ROIC: 37%
ADVERTISEMENT
D/E versus Industry D/E: 27.2% vs.61.2%
Current P/E versus Industry P/E: 12.6 vs. 18.6
Regeneron Pharmaceuticals
5-Year Average ROE: 21.5%
ADVERTISEMENT
5-Year Average ROIC: 18.3%
D/E versus Industry D/E: 9.8% vs. 57.1%
5-year average pretax PM versus 5-year average industry PM: 30.8% vs. 19.7%
Current P/E versus Industry P/E: 18.9 vs. 25.3
Urban Outfitters
ADVERTISEMENT
5-Year Average ROE: 15.6%
5-Year Average ROIC: 15.2%
D/E versus Industry D/E:0% vs. 19.5%
5-year average pretax PM versus 5-year average industry PM: 10.3% vs. 6.1%
Current P/E versus Industry P/E: 14.5 vs. 18.6
ADVERTISEMENT
Bed Bath & Beyond
5-Year Average ROE: 25.4%
5-Year Average ROIC: 18.6%
D/E versus Industry D/E: 51.4% vs. 112.7%
5-year average pretax PM versus 5-year average industry PM: 10.4% vs. 6.6%
ADVERTISEMENT
Current P/E versus Industry P/E: 6.7 vs. 15.1
JOIN OUR PULSE COMMUNITY!
ADVERTISEMENT
Eyewitness? Submit your stories now via social or:
Email: eyewitness@pulse.ng
ADVERTISEMENT