Watchlist Update - Q2 2025
Goal of Watchlist Updates
To reiterate the goal of this website: I analyze 50 companies per year to determine whether it’s a high-quality business with strong long-term prospects.
Instead of evaluating the entire stock market, I focus on a narrower universe of companies that exhibit characteristics I value—durable competitive advantages, sound financials, and strong management.
The list of companies that pass my initial quality screen is continually updated here.
When I evaluate these businesses, they are often not trading at attractive valuations. In those cases, I add them to a watchlist and wait patiently for better entry points.
One challenge with this approach is that great companies rarely look cheap on traditional screening metrics.
Take Brown-Forman as an example: it's currently the cheapest name on my watchlist, trading at a forward P/E of 16.3x and a price-to-sales ratio of 3.13x. That might not appear cheap on a typical value screen, which often looks for P/E ratios under 10 or price/sales below 2. But for Brown-Forman—which usually trades at around 30x earnings and 7x sales—this is historically cheap.
We’ve seen this pattern before. A few years ago, many of the major tech stocks were trading at attractive levels, but only a few (like META) showed up on traditional value screens. I took advantage of that dislocation in 2022, and the results were very positive for my portfolio.
That’s the essence of this project: to identify high-quality businesses, track them over time, and highlight when they’re trading at unusually attractive valuations—even when they’re not appearing on traditional value screens.
By regularly updating the watchlist and sharing detailed analysis, my goal is to help subscribers recognize compelling opportunities before they become obvious to the broader market.
Potentially Undervalued Names
Here is the updated list of watchlist names that are trading well below their usual valuation multiples: