Recap from February’s Picks
Our Most Attractive Stocks (+7.7%) outperformed the S&P 500 (+3.9%) last month. Most Attractive Large Cap stock Hyatt Hotels (H) gained 23% and Most Attractive Small Cap stock Asbury Automotive Group (ABG) was up 31%. Overall, 25 out of the 40 Most Attractive stocks outperformed the S&P 500 in February.
Our Most Dangerous Stocks (+7.1%) underperformed the S&P 500 (+3.9%) last month. Most Dangerous Large Cap stock Intercontinental Exchange (ICE) fell by 12% and Most Dangerous Small Cap Stock Diebold (DBD) fell by 6%. Overall, 20 out of the 40 Most Dangerous stocks outperformed the S&P 500 in February.
The successes of the Most Attractive and Most Dangerous stocks highlight the value of our forensic accounting. Being a true value investor is an increasingly difficult, if not impossible, task considering the amount of data contained in the ever-longer annual reports. By analyzing key details in these SEC filings, our research protects investors’ portfolios and allows our clients to execute value-investing strategies with more confidence and integrity.
33 new stocks make our Most Attractive list and 28 new stocks fall onto the Most Dangerous list this month. March’s Most Attractive and Most Dangerous stocks were made available to members on March 3, 2016.
Our Most Attractive stocks have high and rising return on invested capital (ROIC) and low price to economic book value ratios. Most Dangerous stocks have misleading earnings and long growth appreciation periods implied by their market valuations.
Most Attractive Stock Feature for March: Southwest Airlines (LUV: $42/share)
Southwest Airlines (LUV), passenger airline operator, is one of the additions to our Most Attractive stocks for March.
Some may argue that Southwest (and other airlines) has benefited significantly from lower oil prices and that may be correct. However, Southwest’s success has been building for multiple years, not just because of macro trends. Since 2008, Southwest’s net operating profit after-tax (NOPAT) has grown by 35% compounded annually.
