John Neff’s Screen Results
John Neff, turns out, is a lot like me. Likes buying quality companies when they’re undervalued and out of favor. Makes sense to me. So he had a method/equation he used to find investable companies. If Total Return (earnings growth + dividend yield) divided by the price to earnings ratio was at least 2:1, he took interest. Using numbers provided by Simply Wall Street, here is a list of quality companies whose growth + yield are more than 2x the current P/E ratio. All are profitable and relatively stable, out of favor and relatively cheap. Obviously, do your own research. I just want to share some of the results to offer up new ideas to anyone looking to spread their wings.
Here are the results, I do own some of these FYI.
I share my portfolio, but to save anyone time, I currently own $MATX , $WIRE , $BCC , $MDC , and held $LU is the past, but it appreciated like 30% in a week immediately after I bought it (100% luck to happen that quickly), that’s a sell in my book. Gotta remember to not be greedy, pigs get slaughtered. If I can make 20%-30% in a month, I’ll take it and move on. Too many opportunities to make money to be in love with any stock.
I hope that provides some new companies for a few value investors. Enjoy!
Remember, if you like charts, you’ll hate most of these stocks😉I go against the crowds momentum, hence the success.
On a side note, $MATX & $WIRE are showing up on lots of my different quality screens. Those are the two you may want to evaluate first😉
Let me know what you like or hate, be sharing one a week for a while.
PS: I mentioned I use ZERO forward looking anything; however, to build Neff’s screen, I had to use 12 month FWD earnings estimates to estimate total return. I reduced analyst earnings estimates by 10% to increase my margin of safety further and ensure estimates were conservative. This will be the ONLY time forward looking anything will be used in a post of mine🤙
$BCC Managements' Good Decisions.
Boise Cascade Company has been one of the largest beneficiaries of the pandemic with shares up over 250% since the beginning. This is due to the significant increase in the price of lumber and building products in general.

Management recognized that this price inflation was temporary and set to work deploying capital to de-lever, as well as bolster balance sheet cash.

The significant jump in cash flow would indicate special conditions. And I would expect a contraction over the next few years.

Liquidity or Balance Sheet Cash has grown far faster over the last 2 years.

Net Leverage is far below the company's long-term goal of Sub-2x.

Unfortunately for $BCC, the price of random-length wood is steadily coming down.

It seems like the run was good while it lasted but I would expect with housing starting to show signs of slowing down as well as lumber prices falling the extremely good times might be coming to a close.

I do think that the management team has done a fine job these last few years and I would expect them to be able to continue to run the company well into the future.
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