Newsletter - August 25th, 2024

Dear Reader,

Attached is a recent list of stocks that passed value screens (e.g. below net current asset value, below tangible equity, etc.) but don’t meet our investment criteria - and our reasoning.

This may help you avoid some ‘value traps’, and stocks that aren’t sufficiently attractive compared to opportunities available today.

For reports of stocks that pass our quantitative and qualitative standards:

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Charlotte Cuthbertson - Migo Opportunities

Migo "exploits valuation anomalies and discounts in other investment trusts":

4:00 Perception vs. Reality

Migo's investing (like ours) is, in essence, an arbitrage between market perception and business reality.

We try to stick as close to the facts as possible - usually relying on the balance sheet to determine minimum investment value - and comparing it to the market price to exploit potential discrepancies.

2:00 Examples of overlooked industries

When interest rates were rising, industries like infrastructure, renewables, ship leasing, biotech, growth private equity, etc. were sold down excessively below fair value.

We focus on stocks that seem mispriced relative to liquid assets and earning power.

9:00 Management fidelity

If an investor doesn't have the ability to influence management distributions, it would be logical to limit himself to value opportunities where management has demonstrated fidelity towards shareholders via generous dividends and buybacks/repurchases. These are the stocks we focus on.

Though other opportunities may seem more undervalued, ultimately it's the cash flow distributed to shareholders that determines investment value.

26:45 Buybacks

Buybacks are most beneficial when stocks trade at discounts to fair value. Hence, these are particularly valuable in the stocks we report on.

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For reports on the best investment values in stocks worldwide:

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Wish you an excellent week ahead.