The 2026 VSG Stock List
Last year, I introduced the stock list—a culmination of this site’s work analyzing companies one by one through fundamental security analysis. The goal was to build a universe of businesses that meet my criteria for being truly wonderful companies.
From there, I layered in a quantitative screen, focusing on companies whose forward earnings yield (and EBIT/EV yield) exceeds the 10-year Treasury. I then rank these names by the size of their discount to their five-year average price-to-sales multiple.
After narrowing the universe using that benchmark, I track the performance of a group of 15 stocks over the course of the year. This is my attempt to apply a disciplined, quantitative framework to what is otherwise a fundamentally driven research process.
The objective is simple: own the cheapest companies within a high-quality universe. The approach is similar in spirit to the Magic Formula, but with a stronger qualitative foundation and a broader set of valuation metrics than a single factor.
By measuring the performance of this group, I hope to gain insight into whether this process is actually adding value. For more active investors, the list also serves as a starting point—15 companies worthy of deeper, independent research.
I’ll publish the performance results of last year’s list next weekend. For now, I wanted to share an update on which companies will make up the list for the coming year.
The 2026 Stock List