The fact that this list is growing at the same time the overall indices are rising show the narrow breadth of this rally.
Here are the weekly results from this screen:
| Name | Ticker | Price | Fair Value | Margin of Safety | Yield % | MOS % |
| Gap Inc | GPS | $25.76 | $45.00 | $19.24 | 3.5% | 43% |
| MSC Industrial Direct Co Inc | MSM | $56.88 | $79.00 | $22.12 | 2.8% | 28% |
| Eaton Corp PLC | ETN | $50.58 | $65.00 | $14.42 | 4.4% | 22% |
| Parker Hannifin Corp | PH | $95.69 | $120.00 | $24.31 | 2.6% | 20% |
| Rockwell Automation Inc | ROK | $101.54 | $120.00 | $18.46 | 2.6% | 15% |
| John Wiley & Sons Inc Class A | JW.A | $44.97 | $53.00 | $8.03 | 2.7% | 15% |
The Gap is getting ridiculously cheap – might make a trade if it drops below $25 a share. Making a play on the GAP is a little tricky – they are paying a dividend on January 4th, 2016 – so that would have to be factored into the trade. Also, the weakness in retail suggests Christmas Shopping is not going well – so it might make sense to wait a little longer – also keeping an eye on Wal-Mart in this space (another company that I don’t particularly like – but is sporting a cheap valuation).
Based on the following screen:
- Morningstar analysis available.
- Less than 5% above its 52 week low.
- Greater than or equal to Narrow moat.
- Free cash flow/enterprise value greater than 5% (should be above what the 10 Year Treasury Bond is yielding).
- Financial Health Grade >= B.
- Forward P/E <= 20.
- Stock Industry not = Asset Management
- Dividend Yield % >= 2.5
- For candidates that have passed all the filters, review the individual stocks Return on Invested Capital (ROIC) for the previous 10 years to select the best long term candidates.
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