1. How to use GuruFocus - Tutorials
  2. What Is in the GuruFocus Premium Membership?
  3. A DIY Guide on How to Invest Using Guru Strategies
James Li
James Li
Articles (464)  | Author's Website |

May 15 Forum Update: 'Buffett CNBC' Edition

A summary of Forum activity for April and May

Throughout April and May, our GuruFocus Forum users shared several meaningful posts on value investing. The top posts included:

Additionally, Forum users continued discussing Valeant Pharmaceuticals International Inc. (NYSE:VRX), a company that Francis Chou (Trades, Portfolio) invested in 1.5 million shares during the first quarter.

CNBC launches Buffett archive

Berkshire Hathaway Inc. (NYSE:BRK.A)(NYSE:BRK.B) CEO Warren Buffett (Trades, Portfolio) said several times that “it is far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” As discussed in a previous article, GuruFocus defines an undervalued predictable company as one that has a predictability rank of at least four stars and trades below its intrinsic value based on the DCF model.

On May 3, we had a very successful 2018 value conference in Omaha, the headquarters of Berkshire. In honor of the 2018 Berkshire shareholder meeting, CNBC launched the Buffett Archive, which allows investors to access a wide variety of shareholder letters and interviews from Buffett and Charlie Munger (Trades, Portfolio).

A tale of two companies

Based on their financials, Valeant is “undervalued but low quality” while Salesforce.com is “high quality but overvalued.” Although the Canada-based drug manufacturer reported good organic growth in the past quarter, Valeant’s financial strength ranks a poor 3 out of 10, driven by dismal interest coverage of 0.23 and a weak Altman Z-score of 0.02.

1953138167.png

Despite poor financial strength, Valeant is trading near its minimum price-book value and its minimum price-sales value, suggesting possible undervaluation.

1526395579667.png

1526395589531.png

Salesforce.com, on the other hand, is trading near a 10-year high and approximately 1.16 times its median price-sales value. Despite this, the San Francisco-based customer relationship management company has a GuruFocus business predictability rank of four-stars, suggesting consistent revenue and earnings growth.

1106271790.png

Value screeners continue finding good opportunities

According to Table 1, 53 U.S. companies made the undervalued predictable screener. Such companies include Torchmark Corp. (NYSE:TMK), The Walt Disney Co. (NYSE:DIS), Ross Stores Inc. (NASDAQ:ROST) and Ulta Beauty Inc. (NASDAQ:ULTA). GuruFocus Forum users discussed the valuations for Ulta in several posts:

Our Premium membership gives access to various value screeners, including the Buffett-Munger Screener and the Historical Low Price-Sales Screeners.

Screener Name

USA

Canada

UK / Ireland

Europe

Asia

Oceania

Latin America

Africa

India

Ben Graham Net-Net

125

70

40

210

483

18

6

10

40

Undervalued Predictable

51

5

26

55

42

0

19

6

5

Buffett-Munger

23

5

13

39

62

1

9

3

19

Historical Low Price-Sales

10

2

6

22

81

1

6

3

7

Historical Low Price-Book

13

3

12

26

76

0

14

8

11

Peter Lynch Growth

30

2

16

53

72

3

28

6

11

Walter Schloss

21

25

9

46

274

12

12

6

10

Table 1

Please continue adding to our Forum

We like to award the writer of top Forum posts with a free copy of "Invest Like a Guru" on a monthly basis. Please continue adding good posts to our Forum to help it continue to thrive in 2018.

Disclosure: No positions.

About the author:

James Li
I am an editorial assistant and researcher at GuruFocus. I have a Master's in Finance from SMU, and I enjoy writing reports on financial trends and investor portfolios. Follow me on Twitter at @JamesLiGuru!

Visit James Li's Website


Rating: 5.0/5 (1 vote)

Voters:

Comments

Please leave your comment:


Performances of the stocks mentioned by James Li


User Generated Screeners


doniemaherScreen #30 - 10% Return on Net
DBrizanIutil19May2018 12p
DBrizanIutil19May2018 1159p
DBrizanIutil19May2018 1158p
DBrizanIutil19May2018 1116p
DBrizanIutilty19May2018
DBrizandiv19May2018 1050p
vishnu88Smead Filters
DANGORDON5-19-18 RET EQ RET CAP 12 %
vikas_salgiaFR
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)

GF Chat

{{numOfNotice}}
FEEDBACK