Posts In: Premium Articles-01

Andrew Kuhn October 9, 2017 Premium Articles-01, Stock Ideas

A Few Thoughts on Hostess Brands

“Your premium brand had better be delivering something special, or it’s not going to get the business” -Warren Buffett For the past few weeks I have been studying and doing research on Hostess Brands, the maker of the classic chocolate cupcake with the squiggly white frosting line and of course the iconic, golden, cream-filled Twinkie. At first glance, the company passed almost all my filters on my investment checklist for a company I would want to be involved with. They claim to have a 90%...

This content is for Regular Membership and Annual Membership members only. Please login or register to view our content.
Log In Register
Read more
Andrew Kuhn September 20, 2017 Premium Articles-01

Warren Buffett’s Partnership Letters and My Investing Thought Process

“You can’t predict. You can Prepare.” -Howard Marks I have been reading all of Warren Buffett’s old partnership letters the past week or so. These letters are the letters he wrote to his Investors yearly (and then semi-annually) from 1957- 1970 before winding down his partnerships to eventually run Berkshire. I was inspired to do so because I have also been rereading The Snowball by Alice Schroeder’s for the past month, and it’s awesome how it takes you back to the beginning and goes year...

This content is for Regular Membership and Annual Membership members only. Please login or register to view our content.
Log In Register
Read more
Geoff Gannon September 6, 2017 Premium Articles-01

Why Ad Agencies Should Always Buy Back Their Own Stock

Someone who’s been reading my blog for the past few years emailed me this question:   “With (Omnicom), I particularly like the durability of the advertising agency industry, the nature of the customer relationship (long term in nature and high retention rate), it operates in a rational duopoly environment and good capital allocation policy of John Wren. I also like WPP which also looks attractively valued at around £14 but I prefer OMC as it uses the excess cash to buy back its shares compared...

This content is for Regular Membership and Annual Membership members only. Please login or register to view our content.
Log In Register
Read more
Geoff Gannon September 6, 2017 Premium Articles-01

Hold Cash: Wait till You Get Offered 65 Cents on the Dollar

A Focused Compounding member who fears the stock market is expensive posted this comment: “Hi Geoff, S&P today is expensive based on TTM PE of 24 and CAPE of about 30. An investor whose holdings consist entirely of stocks outside S&P500, will still see a drop in the prices of her equities if the S&P falls even if she has bought her holdings significantly below their estimated fair values. In your opinion, what’s the best way to position oneself going forward with the goal of...

This content is for Regular Membership and Annual Membership members only. Please login or register to view our content.
Log In Register
Read more
Geoff Gannon September 5, 2017 Premium Articles-01

Weight Watchers (WTW): Mistakes Made Over 4 Years of (Emotional) Volatility

I lost a lot of money in Weight Watchers. Let’s look at why that was.   As I write this article, Weight Watchers (WTW) stock is at $44.30 a share.   I bought my shares at $37.68 a share in 2013 and sold them (in March of 2017) at $19.40. So, I realized a loss of 49%. I also tied up money for about 3.5 years. During this same time period, the S&P 500 returned about 12% a year. I probably could have found something...

This content is for Regular Membership and Annual Membership members only. Please login or register to view our content.
Log In Register
Read more
Geoff Gannon September 5, 2017 Premium Articles-01

Unleveraged Return on Net Tangible Assets: It Only Matters When Coupled with Growth

The best way for you to understand unleveraged return on net tangible assets is to look at the reports in the Library section of Focused Compounding. I’m going to give you the basic formula for return on unleveraged net tangible assets here, but it won’t make as much sense as seeing the calculation for yourself by looking down each yearly column of the “datasheet” on one of the 20+ reports in the Focused Compounding library.   The definition of return on unleveraged net tangible assets...

This content is for Regular Membership and Annual Membership members only. Please login or register to view our content.
Log In Register
Read more
Geoff Gannon August 29, 2017 Premium Articles-01

The Market is Overpriced: These 3 Stocks Aren’t

Most stocks are now overpriced. Historically, a normal price for a stock has been about a P/E of 15. And historically, stocks have outperformed other assets. Therefore, it makes sense to buy above average businesses when their shares trade at a P/E of 15. Right now, I see 3 above average businesses trading at about a P/E of 15: Cheesecake Factory (CAKE) Omnicom (OMC) Howden Joinery I’m not buying any of these stocks personally right now. However, if you asked me right now whether or...

This content is for Regular Membership and Annual Membership members only. Please login or register to view our content.
Log In Register
Read more
Geoff Gannon July 27, 2017 Geoff's Answers, Premium Articles-01

How to Read Between the Lines of a 10-K

Question “I have read some of your Singular Diligence content and one of the most interesting parts of the reading are the notes that you and Quan used and published in those reports. So one of the most remarkable things that I have noticed in the notes is that you did not use a lot of information in the annual reports. And this sounds intriguing to me since I am a regular reader of your blog and you have always emphasized how important it is...

This content is for Regular Membership and Annual Membership members only. Please login or register to view our content.
Log In Register
Read more
Geoff Gannon July 17, 2017 Geoff's Answers, Premium Articles-01

How to Judge a Company’s Bargaining Power With its Customers and Suppliers

A Focused Compounding member asked me this question: “…what are the factors we should be thinking about when assessing the bargaining power of a given business relative to its customers and suppliers?” In an earlier memo, I talked about “market power”. My definition of market power is the ability of a company to make demands of its customers or suppliers without fearing that such demands will end their relationship. Why would a supplier or customer agree to demands without considering ending the relationship? Dependency. Recently,...

This content is for Regular Membership and Annual Membership members only. Please login or register to view our content.
Log In Register
Read more
Geoff Gannon June 21, 2017 Premium Articles-01

Finding the Right P/E Multiple – Or How to Handicap a Stock

First, a huge warning about the tables I’ll be showing you in this memo. The P/E multiples shown here are useful as a theoretical tool for getting some idea of how important durability – being able to know a stock will still be turning an annual profit more than 5 years from now – and growth (being able to know a stock will compound intrinsic value faster than the overall market) is in finding the right P/E for a stock. Basically, what I’m saying here...

This content is for Regular Membership and Annual Membership members only. Please login or register to view our content.
Log In Register
Read more