Buffett: Gone Shopping?

A screen searching for stocks Warren Buffett (BRK.B) may be interested in turned up 28 names, but only one – ADM – is a current Berkshire holding.

Most likely to catch the Oracle’s eye from the rest of the list, writes Jack Hough in Barron’s — Screening For Stocks Buffett Might Buy , is Sysco (SYY), Cummins (CMI), and Illinois Tool Works (ITW). [Seeking Alpha]

On closer examination, we’d concur on Sysco (SYY) but I’m not so sure about most of the others.

A few years ago I wrote an article that took a look at Coca-Cola through the eyes of Warren Buffett and our stock analysis methodology … as he might have seen it back in 1988-89.

The bottom line is that he appears to embrace quality and projected returns as we’d expect any disciple of Graham to do.

And in that regard, I don’t think there are 28 companies on his list. At least not these 28 companies:

http://www.manifestinvesting.com/dashboards/public/MX4GDT

Value Line Low Total Return Screen (3/1/2013)

Companies of Interest

Normally we limit the list of companies to the highest annualized total return candidates that also have a first or second quintile quality ranking. I made an exception in this case for Southwest Airlines (LUV) because of the forecast boosts in this week’s updates — earning LUV a spot on the Materially Stronger part of the update.

Materially Stronger: Clean Harbors (CLH), CoStar Group (CSGP), Gartner (IT), Genessee & Wyoming (GWR), Jack in the Box (JACK), Southwest Airlines (LUV)

Materially Weaker: Arkansas Best (ABFS), Frontline (FRO), United Parcel Service (UPS)

Market Barometers

The Value Line low total return forecast is 7.2%, down slightly from 7.3% last week.

Although we could face a correction near-term, no alarms are sounding on the New Highs vs. New Lows trend … suggesting that protective measures are not yet necessary. The S&P 500 relative strength index has relaxed back to 55.9 after recently being in the overbought (>70) range. Be selective and with MIPAR at 7%, select high-quality and bias overall portfolio quality and financial strength to the higher end of long-term target ranges.

Challenge Club (February 2013)

Challenge Club – February 2013

It’s more than a mantra. When things get a little tough, battle-tested investors go shopping.

And they go shopping with a specific shopping list in hand — a quest to identify leadership companies selling at attractive prices.

The Challenge Club has more than a little cash on hand (10.9% of total assets) so we need some candidates.

Bring out your best.

Current dashboard: http://www.manifestinvesting.com/dashboards/public/challenge-club

Register to attend Saturday morning’s meeting/webcast at:

http://www.manifestinvesting.com/events/113-challenge-club-february-23-2013