New Stocks On Most Attractive And Most Dangerous Lists: July 2015


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Recap from June Picks

Our Most Attractive Stocks (0.2%) outperformed the S&P 500 (-2.4%) last month. Most Attractive Large Cap stock HCA Holdings (HCA) gained 12% and Most Attractive Small Cap stock First Bancorp (FNLC) was up 12% as well. Overall, 23 out of the 40 Most Attractive stocks outperformed the S&P 500 in June.

Our Most Dangerous Stocks (-0.2%) underperformed the S&P 500 (-2.4%) last month. Most Dangerous Large Cap stock Groupon Inc. (GRPN) fell by 18% and Most Dangerous Small Cap Stock A.H. Belo Corp (AHC) fell by 5%. Overall, 13 out of the 40 Most Dangerous stocks outperformed the S&P 500 in June.

The successes of the Most Attractive and Most Dangerous stocks highlight the value of our forensic accounting. Being a true value investor is an increasingly difficult, if not impossible, task considering the amount of data contained in the ever-longer annual reports. By analyzing key details in these SEC filings, our research protects investors’ portfolios and allows our clients to execute value-investing strategies with more confidence and integrity.

8 new stocks make our Most Attractive list this month and 8 new stocks fall onto the Most Dangerous list this month. July’s Most Attractive and Most Dangerous stocks were made available to members on July 2.

Our Most Attractive stocks have high and rising return on invested capital (ROIC) and low price to economic book value ratiosMost Dangerous stocks have misleading earnings and long growth appreciation periods implied by their market valuations.

Most Attractive Stock Feature for July: Check Point Software Technologies (CHKP: $80/share)

Check Point Software Technologies (CHKP), a worldwide leader in firewall equipment, is one of the additions to our Most Attractive stocks for July and was our Stock Pick of the Week in early June.

Check Point’s leading position in the firewall market has allowed it to build a highly profitable SaaS business. Over the past decade, after-tax profit (NOPAT) has grown by 14% compounded annually. Business strength has remained solid with NOPAT margins upwards of 40% every year since 2010.

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