Geoff Gannon August 31, 2015

Current Price/Appraisal Ratios for All Our Past Stock Picks (That We Still Believe In)

I was reading an interview with the mutual fund manager Wally Weitz when I noticed he kept mentioning the “price to value” of his portfolio. He calculates what he thinks the intrinsic value of each holding in his portfolio is. Then he compares the market price to his appraisal price. This gives him an updated valuation of his portfolio in terms of his own appraisal of each stock’s intrinsic value.

For our newsletter, Quan and I pick one stock a month. We end each issue with an “appraisal price” for that stock. So, it’s easy to calculate today’s price as a percentage of our original appraisal price for each of our past picks.

You can see that calculation in the table below.

Stocks with a price/appraisal percentage in green have an adequate margin of safety. Stocks with a price/appraisal percentage in yellow are somewhat undervalued. Stocks with a price/appraisal percentage in red are overvalued.

Here are all our past picks for Singular Diligence that we still believe in:


Stocks with an adequate margin of safety (34% or more) are in green.

We consider two of our past picks to be mistakes: Town Sports (CLUB) and Weight Watchers (WTW). They do not appear in this table as possible stocks for you to consider (as we don’t think you should consider them – they’re simply too risky to recommend).

Note: As of today, Quan and I don’t own any shares of CLUB. But, we do both still own shares of WTW. So, we’re being hypocrites in regards to Weight Watchers. We haven’t sold the stock ourselves. But, we’re not suggesting anyone else should buy it. You can decide for yourself whether you should pay more attention to our money or our mouths on that one.

Also, Life Time Fitness was picked but does not appear in this table. It went private. So, you can’t buy it anymore. Sorry.

Finally, the “original appraisal prices” for the two parts of the Babcock & Wilcox spin-off (BWX Technologies and BW Enterprises) are after the fact re-calculations. The original issue gave one appraisal price for all of the old Babcock & Wilcox. That stock split into two separately traded parts after we wrote the issue. However, it was relatively easy to re-calculate the values we would have assigned each part had they been separate on the day we wrote the issue. So, Quan and I consider the price/appraisal you see for those two parts of the former Babcock & Wilcox to be accurate.

At today’s prices, we really do think BWX Technologies (BWXT) is an overvalued stock and BW Enterprises (BW) is an undervalued stock.

I’ll have a post about “Good Babcock” and “Bad Babcock” for you soon.

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