I traffic in investment ideas. As I read newspapers, magazines, websites, WhatsApp group chats, e-mail chains, etc., at least a dozen stocks hit my radar every day.
There are four levels of analysis I do: a five- to 15-minute quick glance... a one-hour first look... a multihour closer look... and a full deep dive, which can stretch for days, weeks, months, years, or even decades. (Seriously – I've recently recommended some stocks I first looked at in the 1990s!)
Longtime readers are familiar with my "first look" e-mails, which include my analysis of a company's historical financials and valuation. I typically do these once or twice a week – like last Tuesday with Fiserv (FISV).
If I find a stock interesting, I'll spend a few hours taking a closer look and dedicate a second e-mail to it. For example, I did a first look at PayPal (PYPL) on June 3, then followed up on June 4 with a deeper dive.
In this analysis, I typically review the company's latest quarterly or annual report and investor presentation. I also seek out and try to fairly present both the bull and bear cases for the stock.
At that point, if I'm still excited about the stock, I'll bring it back to my crack team of analysts. We'll then do a full deep dive before deciding whether to recommend it in our flagship newsletter, Stansberry's Investment Advisory.
If so, subscribers will receive a much longer, comprehensive report with our full analysis, detailing why we think it's so compelling. (If you're not a subscriber, you can become one by clicking here.)
What I typically don't write about, however, is my "quick glance." But this is an important exercise that every investor should learn in order to be more successful.
So today, I'd like to share the five- to 15-minute analysis I did on a half-dozen stocks over the past week...
(If you're particularly interested in one or more of them, please let me know in an e-mail by clicking here.)
1) Someone sent me a link to this X post about cable company Charter Communications (CHTR). The five-year stock chart – and the fact that Berkshire Hathaway (BRK-B) used to own the company – caught my eye:
For my quick glances, the first thing I always do is take a look at the stock's long-term chart – and Charter's is grim. As you can see, it hit a 13-year low on Thursday:
I love stock charts like this because they tell me shareholders must be completely demoralized.
Charter has a ton of debt but is consistently free-cash-flow positive and trades at only 3 times this year's earnings estimates. It's definitely worth an hourlong first look, so stay tuned.
2) This other X post flags payment company Western Union (WU), which hit a 52-week low (and, in this case, an all-time low) on Thursday as well:
Here's the long-term stock chart – one that I love to see:
Western Union's revenues and profits have trending downward for 15 years. But it still has healthy free cash flow, which it uses to buy back mountains of stock and easily covers a 13.2% dividend. And the stock trades at 4.1 times this year's estimates.
It's clearly a melting ice cube, but it sure is cheap. So I'll take a closer look at that one, too.
3) After a disappointing earnings report, consulting giant Accenture (ACN) tumbled 18% on Friday and hit a nine-year low. This is another stock chart that gets my value-investing heart racing:
Accenture generates a ton of free cash flow, has a net cash position, pays a 5.1% dividend, and trades at 9.2 times this year's estimates. This is another one worth a closer look.
4) In a Substack post on Thursday, my old friend Michael Burry of The Big Short fame disclosed that he purchased six stocks.
I've written about three of them many times: Fiserv, last week... Adobe (ADBE), most recently on June 12... and Lululemon Athletica (LULU), most recently on May 6.
The other three stocks he bought are software company Veeva Systems (VEEV), animal-health company Zoetis (ZTS), and Latin American e-commerce giant MercadoLibre (MELI).
Veeva has gotten whacked in the "SaaSpocalypse." It's at a six-year low and trades at 16.9 times this year's estimates:
Zoetis is at an eight-year low and trades at 11.4 times:
And MercadoLibre is back down to a price it first reached more than five years ago:
This stock is clearly the outlier in this group, as it hasn't fallen as sharply and trades at a rich 40.9 times this year's estimates. But unlike the others, it's a market-leading, high-growth company, so maybe it's worth a high multiple.
I think all of these stocks are worth a first look. Again, if you're particularly interested in one or more of them, please let me know in an e-mail by clicking here.
Best regards,
Whitney