Economy & Markets

Interest rates spiked this week, sending the U.S. 10-year bond to its highest level in 7 years. The Federal Reserve has well-telegraphed its intention to raise rates after a period of historically low rates, but the stock market responded in kind, tumbling on the news. It's not so much that rising rates are bad for companies - earnings are still robust, the economy is booming and consumers are feeling confident about spending. It's just that rising rates give investors another option for where to put their money. Volume in several big bond exchange traded funds picked up in recent weeks. Banks stand to benefit from rising rates because they can make more money from lending, while rate-sensitive sectors like home builders and consumer get clipped. While the S&P 500 is still led by technology and consumer discretionary stocks this year, in the last week they have ceded leadership to financials, utilities, energy and industrials. The S&P is trading at 20.4 times trailing 12-month earnings, while the Dow Jones Industrial Average is trading at 17.9 trailing earnings.

Some positive numbers:

1. Private payrolls rose by 230,000 in September, well ahead of the 185,000 expected. The government's monthly jobs report is due Friday at 8:30 a.m.

2. ISM's non-manufacturing index jumped to 61.6 last month, its highest level since 2008, when the index was established.

Some not-so-positive numbers:

1. The ECRI's U.S. leading home price index is as weak as it was in 2009, a possible sign of trouble for the economy, and pending sales fell 1.8% in August.

2. Amazon's promise to raise the minimum hourly wage for its workers to $15 sent shockwaves through the retail sector on fears of rising payroll costs at a time when the sector is battling e-commerce for survival.

Recommended Reading

Tim Ferris recently interviewed Oaktree's Howard Marks, who emphasized the importance of knowing your limitations as an investor. The phrase, "I don't know," he says, is something that should be practiced daily. There isn't any one approach that will always lead to a successful outcome. And it's not so much what you buy that's important, it's what you pay, Marks said. The secret to success hinges on the price paid for the stock relative to its intrinsic value. Buying "good things" and avoiding bad ones is not a guarantee that you'll make money. Read more Here are some other articles and blog posts in case you missed them:

Greenlight Retail David Einhorn's Greenlight Capital sold tech stocks in order to buy retail shares in the second quarter, according to the fund's regulatory filing. It bought Gap, Best Buy, and TJX Companies in a bet on consumers, Barron's notes. Read more

Index Benefits Barry Ritholtz debated in his recent Bloomberg column the idea that passive investors will bear the brunt of a stock slump. Funds that made concentrated bets during the dot-com boom fared worse when the bubble burst. That actually argues in favor of low-cost index investing. Read more

Luck Factor AAII Journal ran an interview with Mark Hulbert in which he argued that "luck dominates the short- or even the intermediate-term" with respect to stock market returns. He says he has a greater appreciation for how much uncertainty and risk there is in everyday activities. Read more

Defense Trade During the summer, Barron's ran an interview of Larry Jeddeloh, founder of the Institutional Strategist newsletter and the research firm TIS Group. He says the Trump administration's national defense strategy is "driving economic and trade policy" and added that this poses significant risk to investors: "We will see more protectionism, sanctions, and other disruptive approaches to trade policy." Read more

Misleading Data Value outpaced growth 283% to 126% since the dotcom bubble but it's a totally different story if you shorten the timeline to 2008 until now. A CFA Institute article looked at whether the recent long run of growth stock outperformance suggests that value stocks must be due for an uptick. The data can be misleading. Read more

Data Lag Using short-term macroeconomic data to analyze policy can be tricky, according to an article in Bloomberg . Government data is imperfect, subject to revisions and inadequate to analyze the effects of policy because it can take a while for the response to show up. Read more

Bias Lookout Larry Swedroe wrote in ETF.com that "there is no evidence of persistence in performance greater than randomly expected among active equity managers." Funds in the worst performing quartile, he found, were much more likely to be liquidated or merged out of existence, highlighting the importance of making sure "survivorship bias isn't present in the data." Read more

Dimon Views Jamie Dimon told a meeting of the Aspen Institute in August that the current bull market could continue for another 2 to 3 years, said cyber attacks are "probably the biggest risk" to the U.S., and called cryptocurrencies such as bitcoin a "scam." Read more

Investing Success No sector or style is a safe choice during the next bear market, but there are ways to boost your chances of success, including picking the strategy that works for you, investing in low-cost funds and being patient. Read more

Value Strategies Barron's recently profiled value investor Fred Copper, lead manager of the Columbia Overseas Valuefund. He uses a class value strategy (investing in companies selling at a discount to asset or book value) as well as the style popularized by Warren Buffett that involves buying shares of corporations with wide "economic moats" that are trading at a discount to their peers. Read more

Factor Analysis Swedroe wrote another article for ETF.com about factor investing, based on a study of 27 emerging markets between 1988 and 2014. What he found was size, value and momentum factor anomalies are statistically significant using value-weighted portfolios. Read more

News on Hot List Stocks

Schnitzer Steel said it expects fourth quarter EPS from ongoing operations to be in the range of 95 cents to $1 a shares. For fourth quarter 2017, EPS from continuing operations was 63 cents. The range for the current quarter doesn't include a potential non-cash tax benefit.

Patrick Industries said it completed the acquisition of Engineered Metals and Composites, a South Carolina-based designer and maker of components for the marine industry.

Hot List Performance Update

Since our last newsletter, the S&P 500 returned -1.0%, while the Hot List returned -5.0%. So far in 2015, the portfolio has returned -10.2% vs. 8.5% for the S&P. Since its inception in July 2003, the Hot List is far outpacing the index, having gained 226.6% vs. the S&P's 190.0% gain.

The Trouble with Back Testing

It's well-known that investment managers struggle to keep up with the indexes a lot of the time. Somewhere between 80% and 90% of active managers fall short over the long term after fees are paid. Performance metrics are all the more complicated by testing scenarios from the past. The idea is that this back testing can lead to positive future results by weeding out the bad strategies. But that assumes nothing ever changes, which is almost never the case.

Back testing uses historical data to simulate a trading strategy. An investor can use it to analyze risk and potential for profitability before putting any money on the line.

Computerized trading strategies rely on back testing because they can often be too complicated to evaluate otherwise. But it's fair to say that there's a high risk that some of the bad strategies will get through even the more rigorous of screens.

Computerized investing and index exchange traded funds have created a frenzy of back-testing activity because that's often the only thing new funds and products have to offer investors until they get up and running. Investors should understand what back-tested results mean and what insights they may (or may not) offer for the investment strategy.

This isn't to say that back testing is bad. Data is an important tool to investment managers. Anyone using a quantitative model, as we do at Validea, needs data to help develop and perfect investment strategies. But it's not always easy to simulate the conditions of a real investment portfolio and some of the data starts out flawed in one way or another. The inputs aren't perfect, so, neither are the outputs. There can be a tendency to over-rely on back tested data without acknowledging this basic weakness. If actual performance measures improve in accuracy the longer the time period studied, back tested data actually is more error-prone the longer back it goes.

After years of using back testing, we have discovered a few things investors should keep in mind:

1. Human emotion.

Sure data isn't emotional, but the fact set used in back testing can be subject to human whims. A manager can deviate from his strategy, especially when it's not working after a prolonged period of time. Or an investor can panic and act rashly. Both deviations make real-world performance data look much worse than back tested data. The more a strategy loses during down periods and the more it deviates from the benchmark, the bigger that difference is likely to be. And the longer you search over the past, the more likely you are to focus on exotic patterns that are least likely to repeat themselves.

2. Does the test cover a long period of time?

Investment strategies should be designed to perform well over several market cycles to ensure that they aren't based on a view that can't survive long-term. But that can bea lot longer than many investors think. Over the very long-term, value has been more successful than growth as a strategy, but not so if you only examine and back test the data for the last decade.

3. Does the strategy have sound economic reasoning behind it?

The inputs for the back test should have some relation to the outputs. If you test a strategy that relates valuations to stock prices, that's one thing, but using astrological signs to evaluate stocks isn't going to work.

4. Does the test include periods of struggle?

This is along the same thinking of long-term performance. The message is to beware of convenient reference dates. A strategy isn't going to be winning all the time. In-between there will be periods of weakness. A back test that doesn't include periods of weakness isn't likely to be accurate.

5. Does the test make assumptions?

Hindsight is 20-20, and the test should be designed to avoid that bias. Right now, a back test of a value strategy needs to include the last 10 years of underperformance since 2008 or it won't be valid.

There are other pitfalls, of course, but the basic message is that back-tested results need to be viewed with healthy skepticism. Investors need to realize that more often than not back testing is used to sell funds and shouldn't be viewed as accurately portraying how the fund operates in the real world. The objects in the mirror are closer than they seem.

Back testing is just one tool an investor has to evaluate strategies. At Validea we have developed a system that helps remove the emotion and bias from investment decision making by setting up a disciplined and consistent approach based on models tracking the styles of well-known investors. These models were developed to avoid bias as much as possible. That is the way to remove emotion from your investment decision making and put you on the path to success.


Portfolio Holdings
Ticker Date Added Return
CACC 3/9/2018 22.4%
UVE 8/24/2018 3.9%
UFPI 8/24/2018 -7.1%
AVAV 9/21/2018 -2.7%
SCHN 6/29/2018 -18.3%
DHI 8/24/2018 -9.9%
ULTA 9/21/2018 -2.1%
MCFT 9/21/2018 -7.2%
PATK 8/24/2018 -9.1%
MGA 9/21/2018 -6.3%


Guru Analysis
Disclaimer: The analysis is from Validea's selection and interpretation of content from the guru's book or published writings, and is not from nor endorsed by the guru. See Full Disclaimer

CACC   |   UVE   |   UFPI   |   AVAV   |   SCHN   |   DHI   |   ULTA   |   MCFT   |   PATK   |   MGA   |  

CREDIT ACCEPTANCE CORP.

Strategy: Patient Investor
Based on: Warren Buffett

Credit Acceptance Corporation offers financing programs that enable automobile dealers to sell vehicles to consumers. The Company's financing programs are offered through a network of automobile dealers. The Company has two Dealers financing programs: the Portfolio Program and the Purchase Program. Under the Portfolio Program, the Company advances money to dealers (Dealer Loan) in exchange for the right to service the underlying consumer loans. Under the Purchase Program, the Company buys the consumer loans from the dealers (Purchased Loan) and keeps the amounts collected from the consumer. Dealer Loans and Purchased Loans are collectively referred to as Loans. As of December 31, 2016, the Company's target market included approximately 60,000 independent and franchised automobile dealers in the United States. The Company has market area managers located throughout the United States that market its programs to dealers, enroll new dealers and support active dealers.

STAGE 1: "Is this a Buffett type company?"

A bedrock principle for Buffett is that his type of company has a "durable competitive advantage" as compared to being a "price competitive" or "commodity" type of business. Companies with a "durable competitive advantage" are more likely to be found in these sub-industries: Brand Name Fast Food Restaurants, Brand Name Beverages, Brand Name Foods, Brand Name Toiletries and Household Products, Brand Name Clothing, Brand Name Prescription Drugs, Advertising, Advertising Agencies, TV, Newspapers, Magazines, Direct Mail, Repetitive Services for Businesses, Low Cost Producers of Insurance, furniture, or Low Cost Retailers. While you should be easily able to explain where the company's pricing power comes from (i.e. a strong regional brand image, a business tollgate, its main products are #1 or # 2 in its field and has been on the market for years and hasn't changed at all, a consumer or business ends up buying the same product many times in a year, etc. or having the lowest production cost among its competition), there are certain figures that one can look at that can qualify the company as having a durable competitive advantage.


LOOK FOR EARNINGS PREDICTABILITY: PASS

Buffett likes companies to have solid, stable earnings that are continually expanding. This allows him to accurately predict future earnings. Annual earnings per share from earliest to most recent were 2.16, 4.61, 5.67, 7.07, 8.58, 10.54, 11.92, 14.28, 16.31, 29.14. Buffett would consider CACC's earnings predictable. In fact EPS have increased every year. CACC's long term historical EPS growth rate is 30.3%, based on the average of the 3, 4 and 5 year historical eps growth rates, and it is expected to grow earnings 19.8% per year in the future, based on the analysts' consensus estimated long term growth rate. For the purposes of our analysis, we will use the more conservative of the two EPS growth numbers.


LOOK FOR CONSISTENTLY HIGHER THAN AVERAGE RETURN ON EQUITY: PASS

Buffett likes companies with above average return on equity of at least 15% or better, as this is an indicator that the company has a durable competitive advantage. US corporations have, on average, returned about 12% on equity over the last 30 years. The average ROE for CACC, over the last ten years, is 31.1%, which is high enough to pass. It is not enough that the average be at least 15%. For each of the last 10 years, with the possible exception of the last fiscal year, the ROE must be at least 10% for Buffett to feel comfortable that the ROE is consistent. In addition, the average ROE over the last 3 years must also exceed 15%. The ROE for the last 10 years, from earliest to latest, is 19.6%, 28.7%, 32.7%, 33.6%, 33.3%, 32.2%, 35.0%, 31.3%, 27.6%, 36.6%, and the average ROE over the last 3 years is 31.8%, thus passing this criterion.


LOOK FOR CONSISTENTLY HIGHER THAN AVERAGE RETURN ON ASSETS: PASS

Buffett also requires, for financial companies, that the average Return On Assets (ROA) be at least 1% and consistent. Return On Assets is defined as the net earnings of the business divided by the total assets of the business. The average ROA for CACC, over the last ten years, is 9.6%, which is high enough to pass. It is not enough that the average be at least 1%. For each of the last 10 years, with the possible exception of the last fiscal year, the ROA must be at least 1% for Buffett to feel comfortable that the ROA is consistent. The ROA for the last 10 years, from earliest to latest, is 5.8%, 12.2%, 11.5%, 10.3%, 9.7%, 9.9%, 8.8%, 8.6%, 7.7%, 11.3%, thus passing this criterion.


LOOK AT CAPITAL EXPENDITURES: PASS

Buffett likes companies that do not have major capital expenditures. That is, he looks for companies that do not need to spend a ton of money on major upgrades of plant and equipment or on research and development to stay competitive. CACC's free cash flow per share of $28.51 is positive, indicating that the company is generating more cash that it is consuming. This is a favorable sign, and so the company passes this criterion.


LOOK AT MANAGEMENT'S USE OF RETAINED EARNINGS: PASS

Buffett likes to see if management has spent retained earnings in a way that benefits shareholders. To figure this out, Buffett takes the total amount of retained earnings over the previous ten years of $110.28 and compares it to the gain in EPS over the same period of $26.98. CACC's management has proven it can earn shareholders a 24.5% return on the earnings they kept. This return is more than acceptable to Buffett. Essentially, management is doing a great job putting the retained earnings to work.


HAS THE COMPANY BEEN BUYING BACK SHARES: BONUS PASS

Buffett likes to see falling shares outstanding, which indicates that the company has been repurchasing shares. This indicates that management has been using excess capital to increase shareholder value. CACC's shares outstanding have fallen over the past five years from 22,940,001 to 19,000,000, thus passing this criterion. This is a bonus criterion and will not adversely affect the ability of a stock to pass the strategy as a whole if it is failed.

The preceding concludes Buffett's qualitative analysis. If and when he gets positive responses to all the above criteria, he would then proceed with a price analysis. The price analysis will determine whether or not the stock should be bought. The following is how he would evaluate CACC quantitatively.

STAGE 2: "Should I buy at this price?" Although a firm may be a Buffett type company, he won't invest in it unless he can get a favorable price that allows him a great long term return.


CALCULATE THE INITIAL RATE OF RETURN: [No Pass/Fail]

Buffett compares his type of stocks to bonds, and likes to see what a company's initial rate of return is. To calculate the initial rate of return, take the trailing 12-month EPS of $33.24 and divide it by the current market price of $415.50. An investor, purchasing CACC, could expect to receive a 8.00% initial rate of return. Furthermore, he or she could expect the rate to increase 19.8% per year, based on the analysts' consensus estimated long term growth rate, as this is how fast earnings are growing.


COMPARE THE INITIAL RATE OF RETURN WITH THE LONG-TERM TREASURY YIELD: PASS

Buffett favors companies in which the initial rate of return is around the long-term treasury yield. Nonetheless, he has invested in companies with low initial rates of return, as long as the yield is expected to expand rapidly. Currently, the long-term treasury yield is about 3.25%. Compare this with CACC's initial yield of 8.00%, which will expand at an annual rate of 19.8%, based on the analysts' consensus estimated long term growth rate. The company is the better choice, as the initial rate of return is close to or above the long term bond yield and is expanding.


CALCULATE THE FUTURE EPS: [No Pass/Fail]

CACC currently has a book value of $93.79. It is safe to say that if CACC can preserve its average rate of return on equity of 31.1% and continues to retain 100.00% of its earnings, it will be able to sustain an earnings growth rate of 31.1% and it will have a book value of $1,401.75 in ten years. If it can still earn 31.1% on equity in ten years, then expected EPS will be $435.30.


CALCULATE THE FUTURE STOCK PRICE BASED ON THE AVERAGE ROE METHOD: [No Pass/Fail]

Now take the expected future EPS of $435.30 and multiply them by the lower of the 5 year average P/E ratio or current P/E ratio (12.5) (5 year average P/E in this case), which is 12.4 and you get CACC's projected future stock price of $5,410.77.


CALCULATE THE EXPECTED RATE OF RETURN BASED ON THE AVERAGE ROE METHOD: [No Pass/Fail]

Now add in the total expected dividend pool to be paid over the next ten years, which is $0.00. This gives you a total dollar amount of $5,410.77. These numbers indicate that one could expect to make a 29.3% average annual return on CACC's stock at the present time. Buffett would consider this an absolutely fantastic expected return.


CALCULATE THE EXPECTED FUTURE STOCK PRICE BASED ON AVERAGE EPS GROWTH: [No Pass/Fail]

If you take the EPS growth of 19.8%, based on the analysts' consensus estimated long term growth rate, you can project EPS in ten years to be $202.41. Now multiply EPS in 10 years by the lower of the 5 year average P/E ratio or current P/E ratio (12.5) (5 year average P/E in this case), which is 12.4. This equals the future stock price of $2,515.94. Add in the total expected dividend pool of $0.00 to get a total dollar amount of $2,515.94.


CALCULATE THE EXPECTED RETURN USING THE AVERAGE EPS GROWTH METHOD: [No Pass/Fail]

Now you can figure out your expected return based on a current price of $415.50 and the future expected stock price, including the dividend pool, of $2,515.94. If you were to invest in CACC at this time, you could expect a 19.73% average annual return on your money. Buffett would consider this a great return.


LOOK AT THE RANGE OF EXPECTED RATE OF RETURN: PASS

Based on the two different methods, you could expect an annual compounding rate of return somewhere between 19.7% and 29.3%. To pinpoint the average return a little better, we have taken an average of the two different methods. Investors could expect an average return of 24.5% on CACC stock for the next ten years, based on the current fundamentals. Buffett would consider this an exceptional return, thus passing the criterion.

UNIVERSAL INSURANCE HOLDINGS, INC.

Strategy: Growth Investor
Based on: Martin Zweig

Universal Insurance Holdings, Inc. (UVE) is a private personal residential homeowners insurance company in Florida. The Company performs substantially all aspects of insurance underwriting, policy issuance, general administration, and claims processing and settlement internally. The Company's subsidiaries include Universal Property & Casualty Insurance Company (UPCIC) and American Platinum Property and Casualty Insurance Company (APPCIC). UPCIC writes homeowners insurance policies in states, including Alabama, Delaware, Florida, Georgia, Hawaii, Indiana, Maryland, Massachusetts, Michigan, Minnesota, North Carolina, Pennsylvania, South Carolina and Virginia. APPCIC writes homeowners and commercial residential insurance policies in Florida. The Company has developed a suite of applications that provide underwriting, policy and claim administration services, including billing, policy maintenance, inspections, refunds, commissions and data analysis.


P/E RATIO: PASS

The P/E of a company must be greater than 5 to eliminate weak companies, but not more than 3 times the current Market P/E because the situation is much too risky, and never greater than 43. UVE's P/E is 12.13, based on trailing 12 month earnings, while the current market PE is 27.00. Therefore, it passes the first test.


REVENUE GROWTH IN RELATION TO EPS GROWTH: PASS

Revenue Growth must not be substantially less than earnings growth. For earnings to continue to grow over time they must be supported by a comparable or better sales growth rate and not just by cost cutting or other non-sales measures. UVE's revenue growth is 24.96%, while it's earnings growth rate is 22.50%, based on the average of the 3, 4 and 5 year historical eps growth rates. Therefore, UVE passes this criterion.


SALES GROWTH RATE: PASS

Another important issue regarding sales growth is that the rate of quarterly sales growth is rising. To evaluate this, the change from this quarter last year to the present quarter (13.1%) must be examined, and then compared to the previous quarter last year compared to the previous quarter (9.5%) of the current year. Sales growth for the prior must be greater than the latter. For UVE this criterion has been met.


The earnings numbers of a company should be examined from various different angles. Three of these angles are stability in the trend of earnings, earnings persistence, and earnings acceleration. To evaluate stability, the stock has to pass the following four criteria.


CURRENT QUARTER EARNINGS: PASS

The first of these criteria is that the current EPS be positive. UVE's EPS ($1.30) pass this test.


QUARTERLY EARNINGS ONE YEAR AGO: PASS

The EPS for the quarter one year ago must be positive. UVE's EPS for this quarter last year ($0.82) pass this test.


POSITIVE EARNINGS GROWTH RATE FOR CURRENT QUARTER: PASS

The growth rate of the current quarter's earnings compared to the same quarter a year ago must also be positive. UVE's growth rate of 58.54% passes this test.


EARNINGS GROWTH RATE FOR THE PAST SEVERAL QUARTERS: FAIL

Compare the earnings growth rate of the previous three quarters with long-term EPS growth rate. Earnings growth in the previous 3 quarters should be at least half of the long-term EPS growth rate. Half of the long-term EPS growth rate for UVE is 11.25%. This should be less than the growth rates for the 3 previous quarters which are -62.67%, 213.16% and 30.23%. UVE does not pass this test, which means that it does not have good, reasonably steady earnings.


This strategy looks at the rate which earnings grow and evaluates this rate of growth from different angles. The 4 tests immediately following are detailed below.


EPS GROWTH FOR CURRENT QUARTER MUST BE GREATER THAN PRIOR 3 QUARTERS: PASS

If the growth rate of the prior three quarter's earnings, 30.15%, (versus the same three quarters a year earlier) is less than the growth rate of the current quarter earnings, 58.54%, (versus the same quarter one year ago) then the stock passes.


EPS GROWTH FOR CURRENT QUARTER MUST BE GREATER THAN THE HISTORICAL GROWTH RATE: PASS

The EPS growth rate for the current quarter, 58.54% must be greater than or equal to the historical growth which is 22.50%. UVE would therefore pass this test.


EARNINGS PERSISTENCE: FAIL

Companies must show persistent yearly earnings growth. To fulfill this requirement a company's earnings must increase each year for a five year period. UVE, whose annual EPS growth before extraordinary items for the previous 5 years (from the earliest to the most recent fiscal year) were 1.56, 2.08, 2.97, 2.79, and 3.15, fails this test.


LONG-TERM EPS GROWTH: PASS

One final earnings test required is that the long-term earnings growth rate must be at least 15% per year. UVE's long-term growth rate of 22.50%, based on the average of the 3, 4 and 5 year historical eps growth rates, passes this test.


INSIDER TRANSACTIONS: PASS

A factor that adds to a stock's attractiveness is if insider buy transactions number 3 or more, while insider sell transactions are zero. Zweig calls this an insider buy signal. For UVE, this criterion has not been met (insider sell transactions are 220, while insiders buying number 77). Despite the fact that insider sells out number insider buys for this company, Zweig considers even one insider buy transaction enough to prevent an insider sell signal, therefore there is not an insider sell signal and the stock passes this criterion.

UNIVERSAL FOREST PRODUCTS, INC.

Strategy: Price/Sales Investor
Based on: Kenneth Fisher

Universal Forest Products, Inc. is a holding company. The Company, through its subsidiaries, supplies wood, wood composite and other products to three primary markets, such as retail, construction and industrial. Its segments include North, South, West, Alternative Materials, International, idX Holdings, Inc. (idX) and Corporate divisions. idX is a designer, manufacturer and installer of in-store environments. It designs, manufactures and markets wood and wood-alternative products for national home centers and other retailers; structural lumber and other products for the manufactured housing industry; engineered wood components for residential and commercial construction; specialty wood packaging, components and packing materials for various industries, and customized interior fixtures used in a range of retail stores, commercial and other structures. Its customers comprising retail market are national home center retailers and retail-oriented regional lumberyards, among others.


PRICE/SALES RATIO: PASS

The prospective company should have a low Price/Sales ratio. Smokestack (cyclical) companies with a Price/Sales ratio between .4 and .8 represent good values according to this methodology. UFPIpasses this test as its P/S of 0.49 based on trailing 12 month sales, falls within the "good values" range for cyclical companies.


TOTAL DEBT/EQUITY RATIO: PASS

Less debt equals less risk according to this methodology. UFPI's Debt/Equity of 30.06% is acceptable, thus passing the test.


PRICE/RESEARCH RATIO: PASS

This methodology considers companies in the Technology and Medical sectors to be attractive if they have low Price/Research ratios. UFPI is neither a Technology nor Medical company. Therefore the Price/Research ratio is not available and, hence, not much emphasis should be placed on this particular variable.


PRELIMINARY GRADE: Some Interest in UFPI At this Point

Is UFPI a "Super Stock"? NO


PRICE/SALES RATIO: PASS

The prospective company should have a low Price/Sales ratio. Non-Smokestack(non-cyclical) companies with a Price/Sales ratio between .75 and 1.5 are good values. Otherwise, Smokestack(cyclical) companies with a Price/Sales ratio between .4 and .8 represent good values. UFPI's P/S ratio of 0.49 falls within the "good values " range for cyclical industries and is considered attractive.


LONG-TERM EPS GROWTH RATE: PASS

This methodology looks for companies that have an inflation adjusted EPS growth rate greater than 15%. UFPI's inflation adjusted EPS growth rate of 31.16% passes the test.


FREE CASH PER SHARE: PASS

This methodology looks for companies that have a positive free cash per share. Companies should have enough free cash available to sustain three years of losses. This is based on the premise that companies without cash will soon be out of business. UFPI's free cash per share of 0.76 passes this criterion.


THREE YEAR AVERAGE NET PROFIT MARGIN: FAIL

This methodology looks for companies that have an average net profit margin of 5% or greater over a three year period. UFPI, whose three year net profit margin averages 2.98%, fails this evaluation.

AEROVIRONMENT, INC.

Strategy: Small-Cap Growth Investor
Based on: Motley Fool

AeroVironment, Inc. designs, develops, produces, supports and operates a portfolio of products and services for government agencies, businesses and consumers. The Company operates through the Unmanned Aircraft Systems (UAS) segment, which focuses primarily on the design, development, production, support and operation of UAS and tactical missile systems that provide situational awareness, multi-band communications, force protection and other mission effects. The Company supplies UAS, tactical missile systems and related services primarily to organizations within the United States Department of Defense (DoD). The Company's small UAS products include Raven, Wasp AE, Puma AE and Shrike. The Company also offers the Qube, an UAS for law enforcement, search and rescue and fire department personnel.


PROFIT MARGIN: PASS

This methodology seeks companies with a minimum trailing 12 month after tax profit margin of 7%. The companies that pass this criterion have strong positions within their respective industries and offer greater shareholder returns. A true test of the quality of a company is that they can sustain this margin. AVAV's profit margin of 17.17% passes this test.


RELATIVE STRENGTH: PASS

The investor must look at the relative strength of the company in question. Companies whose relative strength is 90 or above (that is, the company outperforms 90% or more of the market for the past year), are considered attractive. Companies whose price has been rising much quicker than the market tend to keep rising. AVAV, with a relative strength of 94, satisfies this test.


COMPARE SALES AND EPS GROWTH TO THE SAME PERIOD LAST YEAR: FAIL

Companies must demonstrate both revenue and net income growth of at least 25% as compared to the prior year. These growth rates give you the dynamic companies that you are looking for. These rates for AVAV (-547.37% for EPS, and 127.12% for Sales) are not good enough to pass.


INSIDER HOLDINGS: PASS

AVAV's insiders should own at least 10% (they own 10.01% ) of the company's outstanding shares which is the minimum required. A high percentage typically indicates that the insiders are confident that the company will do well.


CASH FLOW FROM OPERATIONS: PASS

A positive cash flow is typically used for internal expansion, acquisitions, dividend payments, etc. A company that generates rather than consumes cash is in much better shape to fund such activities on their own, rather than needing to borrow funds to do so. AVAV's free cash flow of $2.50 per share passes this test.


PROFIT MARGIN CONSISTENCY: PASS

AVAV's profit margin has been consistent or even increasing over the past three years (Current year: 7.40%, Last year: 5.45%, Two years ago: 3.84%), passing the requirement. It is a sign of good management and a healthy and competitive enterprise.


R&D AS A PERCENTAGE OF SALES: NEUTRAL

This criterion is not critically important for companies that are not high-tech or medical stocks because they are not as R&D dependant as companies within those sectors. Not much emphasis should be placed on this test in AVAV's case.


CASH AND CASH EQUIVALENTS: PASS

AVAV's level of cash $257.2 million passes this criteria. If a company is a cash generator, like AVAV, it has the ability to pay off debt (if it has any) or acquire other companies. Most importantly, good operations generate cash.


INVENTORY TO SALES: PASS

This methodology strongly believes that companies, especially small ones, should have tight control over inventory. It's a warning sign if a company's inventory relative to sales increases significantly when compared to the previous year. Up to a 30% increase is allowed, but no more. Inventory to Sales for AVAV was 26.24% last year, while for this year it is 13.81%. Since the inventory to sales is decreasing by -12.44% the stock passes this criterion.


ACCOUNT RECEIVABLE TO SALES: PASS

This methodology wants to make sure that a company's accounts receivable do not get significantly out of line with sales. It's a warning sign if a company's accounts receivable relative to sales increases significantly when compared to the previous year. Up to a 30% increase is allowed, but no more. Accounts Receivable to Sales for AVAV was 38.65% last year, while for this year it is 27.18%. Since the AR to sales is decreasing by -11.46% the stock passes this criterion.


LONG TERM DEBT/EQUITY RATIO: PASS

AVAV's trailing twelve-month Debt/Equity ratio (0.00%) is at a great level according to this methodology because the superior companies that you are looking for don't need to borrow money in order to grow.


"THE FOOL RATIO" (P/E TO GROWTH): FAIL

The "Fool Ratio" is an extremely important aspect of this analysis. The methodology says consider selling the shares when the company's Fool Ratio is between 1.0 and 1.30. (AVAV's is 1.04). This is considered to be high.

The following criteria for AVAV are less important which means you would place less emphasis on them when making your investment decision using this strategy:

AVERAGE SHARES OUTSTANDING: PASS

AVAV has not been significantly increasing the number of shares outstanding within recent years which is a good sign. AVAV currently has 24.0 million shares outstanding. This means the company is not taking any measures, with regards to the number of shares, that will dilute or devalue the stock.


SALES: PASS

Companies with sales less than $500 million should be chosen. It is among these small-cap stocks that investors can find "an uncut gem", ones that institutions won't be able to buy yet. AVAV's sales of $305.3 million based on trailing 12 month sales, are fine, making this company one such "prospective gem". AVAV passes the sales test.


DAILY DOLLAR VOLUME: FAIL

AVAV does not pass the Daily Dollar Volume (DDV of $39.1 million) test. It exceeds the maximum requirement of $25 million. Stocks that fail the test are too liquid for a small individual investor and many institutions have already discovered it.


PRICE: PASS

This is a very insignificant criterion for this methodology. But basically, low prices are chosen because "small numbers multiply more rapidly than large ones" and the potential for big returns expands. AVAV with a price of $104.29 passes the price test, even though it doesn't fall in the preferred range. The price should be above $7 in order to eliminate penny stocks and below $20 since most stocks in this price range are undiscovered by the institutions.


INCOME TAX PERCENTAGE: FAIL

AVAV's income tax paid expressed as a percentage of pretax income either this year (20.05%) or last year (19.84%) is below 20% which is cause for concern. Because the tax rate is below 20% this could mean that the earnings that were reported are unrealistically inflated due to the lower level of income tax paid. However, we have utilized a sophisticated formula so that the appropriate figures reflect a 'normal' tax rate (35%).

SCHNITZER STEEL INDUSTRIES, INC.

Strategy: Value Investor
Based on: Benjamin Graham

Schnitzer Steel Industries, Inc. is a recycler of ferrous and nonferrous scrap metal, including end-of-life vehicles, and a manufacturer of finished steel products. The Company operates through two segments: the Auto and Metals Recycling (AMR) business and the Steel Manufacturing Business (SMB). The AMR segment collects and recycles auto bodies, rail cars, home appliances, industrial machinery, manufacturing scrap and construction and demolition scrap from bridges, buildings and other infrastructure. AMR's primary products include recycled ferrous and nonferrous scrap metal. The SMB segment produces finished steel products such as rebar, wire rod, coiled rebar, merchant bar and other specialty products using 100% recycled metal sourced from AMR. SMB's products are primarily used in nonresidential and infrastructure construction in North America. SMB operates a steel mini-mill in McMinnville, Oregon that produces finished steel products using recycled metal and other raw materials.


SECTOR: PASS

SCHN is neither a technology nor financial Company, and therefore this methodology is applicable.


SALES: PASS

The investor must select companies of "adequate size". This includes companies with annual sales greater than $1 billion. SCHN's sales of $2,189.4 million, based on trailing 12 month sales, pass this test.


CURRENT RATIO: PASS

The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. SCHN's current ratio of 2.20 passes the test.


LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: PASS

For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that meet this criterion display one of the attributes of a financially secure organization. The long-term debt for SCHN is $171.5 million, while the net current assets are $259.9 million. SCHN passes this test.


LONG-TERM EPS GROWTH: FAIL

Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 10 years. EPS for SCHN were negative within the last 10 years and therefore the company fails this criterion.


P/E RATIO: PASS

The Price/Earnings (P/E) ratio, based on the greater of the current PE or the PE using average earnings over the last 3 fiscal years, must be "moderate", which this methodology states is not greater than 15. Stocks with moderate P/Es are more defensive by nature. SCHN's P/E of 7.35 (using the current PE) passes this test.


PRICE/BOOK RATIO: PASS

The Price/Book ratio must also be reasonable. That is, the Price/Book multiplied by P/E cannot be greater than 22. SCHN's Price/Book ratio is 1.21, while the P/E is 7.35. SCHN passes the Price/Book test.

D. R. HORTON INC

Strategy: Growth/Value Investor
Based on: James P. O'Shaughnessy

D.R. Horton, Inc. is a homebuilding company. The Company constructed and sold homes in 27 states and 79 markets, as of September 30, 2015. The Company's segments include its 39 homebuilding divisions, its financial services operations and its other business activities. In the homebuilding segment, the Company builds and sells single-family detached homes and attached homes, such as town homes, duplexes, triplexes and condominiums. The Company's 39 homebuilding divisions are aggregated into six segments: East Region, South Central Region, Midwest Region, West Region, Southwest Region and Southeast Region. In the financial services segment, the Company sells mortgages and collects fees for title insurance agency and closing services. The Company has subsidiaries that conduct insurance-related operations; construct and own income-producing rental properties; own non-residential real estate, including ranch land and improvements, and own and operate oil and gas-related assets.


MARKET CAP: PASS

The first requirement of the Cornerstone Growth Strategy is that the company has a market capitalization of at least $150 million. This will screen out the companies that are too illiquid for most investors, but still include a small growth company. DHI, with a market cap of $15,271 million, passes this criterion.


EARNINGS PER SHARE PERSISTENCE: PASS

The Cornerstone Growth methodology looks for companies that show persistent earnings growth without regard to magnitude. To fulfill this requirement, a company's earnings must increase each year for a five year period. DHI, whose annual EPS before extraordinary items for the last 5 years (from earliest to the most recent fiscal year) were 1.27, 1.46, 2.03, 2.36 and 2.74, passes this test.


PRICE/SALES RATIO: PASS

The Price/Sales ratio should be below 1.5. This value criterion, coupled with the growth criterion, identify growth stocks that are still cheap to buy. DHI's Price/Sales ratio of 0.97, based on trailing 12 month sales, passes this criterion.


RELATIVE STRENGTH: PASS

The final criterion for the Cornerstone Growth Strategy requires that the Relative Strength of the company be among the top 50 of the stocks screened using the previous criterion. This gives you the opportunity to buy the growth stocks you are searching for just as the market is embracing them. DHI, whose relative strength is 50, is in the top 50 and would pass this last criterion.

ULTA BEAUTY INC

Strategy: P/E/Growth Investor
Based on: Peter Lynch

Ulta Beauty, Inc. is a holding company for the Ulta Beauty group of companies. The Company is a beauty retailer. The Company offers cosmetics, fragrance, skin, hair care products and salon services. The Company offers approximately 20,000 products from over 500 beauty brands across all categories, including the Company's own private label. The Company also offers a full-service salon in every store featuring hair, skin and brow services. The Company operates approximately 970 retail stores across over 48 states and the District of Columbia and also distributes its products through its Website, which includes a collection of tips, tutorials and social content. The Company offers makeup products, such as foundation, face powder, concealer, color correcting, face primer, blush, bronzer, contouring, highlighter, setting spray, shampoos, conditioners, hair styling products, hair styling tools and perfumes. The Company also offers makeup brushes and tools, and makeup bags and cases.


DETERMINE THE CLASSIFICATION:

This methodology would consider ULTA a "fast-grower".


P/E/GROWTH RATIO: PASS

The investor should examine the P/E (25.29) relative to the growth rate (31.57%), based on the average of the 3, 4 and 5 year historical eps growth rates, for a company. This is a quick way of determining the fairness of the price. In this particular case, the P/E/G ratio for ULTA (0.80) makes it favorable.


SALES AND P/E RATIO: PASS

For companies with sales greater than $1 billion, this methodology likes to see that the P/E ratio remain below 40. Large companies can have a difficult time maintaining a growth high enough to support a P/E above this threshold. ULTA, whose sales are $6,311.7 million, needs to have a P/E below 40 to pass this criterion. ULTA's P/E of (25.29) is considered acceptable.


EPS GROWTH RATE: PASS

This methodology favors companies that have several years of fast earnings growth, as these companies have a proven formula for growth that in many cases can continue many more years. This methodology likes to see earnings growth in the range of 20% to 50%, as earnings growth over 50% may be unsustainable. The EPS growth rate for ULTA is 31.6%, based on the average of the 3, 4 and 5 year historical eps growth rates, which is acceptable.


TOTAL DEBT/EQUITY RATIO: PASS

This methodology would consider the Debt/Equity ratio for ULTA (0.00%) to be wonderfully low (equity is at least ten times debt). This ratio is one quick way to determine the financial strength of the company.


FREE CASH FLOW: NEUTRAL

The Free Cash Flow/Price ratio, though not a requirement, is considered a bonus if it is above 35%. A positive Cash Flow (the higher the better) separates a wonderfully reliable investment from a shaky one. This methodology prefers not to invest in companies that rely heavily on capital spending. This ratio for ULTA (1.99%) is too low to add to the attractiveness of the stock. Keep in mind, however, that it does not adversely affect the company as it is a bonus criteria.


NET CASH POSITION: NEUTRAL

Another bonus for a company is having a Net Cash/Price ratio above 30%. Lynch defines net cash as cash and marketable securities minus long term debt. According to this methodology, a high value for this ratio dramatically cuts down on the risk of the security. The Net Cash/Price ratio for ULTA (2.41%) is too low to add to the attractiveness of this company. Keep in mind, however, that it does not adversely affect the company as it is a bonus criteria.

MCBC HOLDINGS INC

Strategy: P/E/Growth Investor
Based on: Peter Lynch

MCBC Holdings, Inc. (MCBC) is a holding company. The Company is a designer and manufacturer of inboard tournament ski boats and V-drive runabouts under the MasterCraft brand. The Company operates through two segments: MasterCraft and Hydra-Sports. The MasterCraft product brand consists of recreational performance boats primarily used for water skiing, wakeboarding and wake surfing, and general recreational boating. The Company distributes the MasterCraft product brand through its dealer network. The Company manufactures a range of Hydra-Sports recreational fishing boats. It also leases a parts warehouse in the United Kingdom to expedite service, primarily to dealers and customers in the European Union. Its MasterCraft-branded portfolio includes Star Series, XSeries and NXT boats. In addition, MCBC offers various accessories, including trailers and aftermarket parts. The Company operates primarily through its subsidiaries, MasterCraft Boat Company, LLC and MCBC Hydra Boats, LLC.


DETERMINE THE CLASSIFICATION:

This methodology would consider MCFT a "fast-grower".


P/E/GROWTH RATIO: PASS

The investor should examine the P/E (16.44) relative to the growth rate (47.61%), based on the average of the 3, 4 and 5 year historical eps growth rates, for a company. This is a quick way of determining the fairness of the price. In this particular case, the P/E/G ratio for MCFT (0.35) is very favorable.


SALES AND P/E RATIO: NEUTRAL

For companies with sales greater than $1 billion, this methodology likes to see that the P/E ratio remain below 40. Large companies can have a difficult time maintaining a growth rate high enough to support a P/E above this threshold. MCFT, whose sales are $332.7 million, is not considered large enough to apply the P/E ratio analysis. However, an investor can analyze the P/E ratio relative to the EPS growth rate.


INVENTORY TO SALES: PASS

When inventories increase faster than sales, it is a red flag. However an increase of up to 5% is considered bearable if all other ratios appear attractive. Inventory to sales for MCFT was 5.11% last year, while for this year it is 6.15%. Since inventory has been rising, this methodology would not look favorably at the stock but would not completely eliminate it from consideration as the inventory increase (1.04%) is below 5%.


EPS GROWTH RATE: PASS

This methodology favors companies that have several years of fast earnings growth, as these companies have a proven formula for growth that in many cases can continue many more years. This methodology likes to see earnings growth in the range of 20% to 50%, as earnings growth over 50% may be unsustainable. The EPS growth rate for MCFT is 47.6%, based on the average of the 3, 4 and 5 year historical eps growth rates, which is considered 'OK'. However, it may be difficult to sustain such a high growth rate.


TOTAL DEBT/EQUITY RATIO: FAIL

MCFT's Debt/Equity (143.09%) is above 80% and is considered very weak. Therefore, MCFT fails this test.


FREE CASH FLOW: NEUTRAL

The Free Cash Flow/Price ratio, though not a requirement, is considered a bonus if it is above 35%. A positive Cash Flow (the higher the better) separates a wonderfully reliable investment from a shaky one. This methodology prefers not to invest in companies that rely heavily on capital spending. This ratio for MCFT (6.89%) is too low to add to the attractiveness of the stock. Keep in mind, however, that it does not adversely affect the company as it is a bonus criteria.


NET CASH POSITION: NEUTRAL

Another bonus for a company is having a Net Cash/Price ratio above 30%. Lynch defines net cash as cash and marketable securities minus long term debt. According to this methodology, a high value for this ratio dramatically cuts down on the risk of the security. The Net Cash/Price ratio for MCFT (-9.56%) is too low to add to the attractiveness of this company. Keep in mind, however, that it does not adversely affect the company as it is a bonus criteria.

PATRICK INDUSTRIES, INC.

Strategy: P/E/Growth Investor
Based on: Peter Lynch

Patrick Industries, Inc. is a manufacturer of component products and distributor of building products and materials for the recreational vehicle (RV) and manufactured housing (MH) industrial markets for customers throughout the United States and Canada. In addition, it is a supplier to certain other industrial markets, such as kitchen cabinet, office and household furniture, fixtures and commercial furnishings, marine, and other industrial markets. The Company's segments include Manufacturing and Distribution. It manufactures a range of products, which include decorative vinyl and paper laminated panels, solid surface, granite and quartz countertops, fabricated aluminum products, wrapped vinyl, paper and hardwood profile mouldings, slide-out trim and fascia, cabinet doors and components, hardwood furniture, fiberglass and plastic component products including front and rear caps and marine helms, interior passage doors, RV painting, and slotwall panels and components, among others.


DETERMINE THE CLASSIFICATION:

This methodology would consider PATK a "fast-grower".


P/E/GROWTH RATIO: PASS

The investor should examine the P/E (13.73) relative to the growth rate (30.46%), based on the average of the 3, 4 and 5 year historical eps growth rates, for a company. This is a quick way of determining the fairness of the price. In this particular case, the P/E/G ratio for PATK (0.45) is very favorable.


SALES AND P/E RATIO: PASS

For companies with sales greater than $1 billion, this methodology likes to see that the P/E ratio remain below 40. Large companies can have a difficult time maintaining a growth high enough to support a P/E above this threshold. PATK, whose sales are $2,039.8 million, needs to have a P/E below 40 to pass this criterion. PATK's P/E of (13.73) is considered acceptable.


INVENTORY TO SALES: PASS

When inventories increase faster than sales, it is a red flag. However an increase of up to 5% is considered bearable if all other ratios appear attractive. Inventory to sales for PATK was 9.82% last year, while for this year it is 10.72%. Since inventory has been rising, this methodology would not look favorably at the stock but would not completely eliminate it from consideration as the inventory increase (0.89%) is below 5%.


EPS GROWTH RATE: PASS

This methodology favors companies that have several years of fast earnings growth, as these companies have a proven formula for growth that in many cases can continue many more years. This methodology likes to see earnings growth in the range of 20% to 50%, as earnings growth over 50% may be unsustainable. The EPS growth rate for PATK is 30.5%, based on the average of the 3, 4 and 5 year historical eps growth rates, which is acceptable.


TOTAL DEBT/EQUITY RATIO: FAIL

PATK's Debt/Equity (144.33%) is above 80% and is considered very weak. Therefore, PATK fails this test.


FREE CASH FLOW: NEUTRAL

The Free Cash Flow/Price ratio, though not a requirement, is considered a bonus if it is above 35%. A positive Cash Flow (the higher the better) separates a wonderfully reliable investment from a shaky one. This methodology prefers not to invest in companies that rely heavily on capital spending. This ratio for PATK (5.45%) is too low to add to the attractiveness of the stock. Keep in mind, however, that it does not adversely affect the company as it is a bonus criteria.


NET CASH POSITION: NEUTRAL

Another bonus for a company is having a Net Cash/Price ratio above 30%. Lynch defines net cash as cash and marketable securities minus long term debt. According to this methodology, a high value for this ratio dramatically cuts down on the risk of the security. The Net Cash/Price ratio for PATK (-39.81%) is too low to add to the attractiveness of this company. Keep in mind, however, that it does not adversely affect the company as it is a bonus criteria.

MAGNA INTERNATIONAL INC. (USA)

Strategy: Growth/Value Investor
Based on: James P. O'Shaughnessy

Magna International Inc. (Magna) is a global automotive supplier. The Company's segments are North America, Europe, Asia, Rest of World, and Corporate and Other. The Company's product capabilities include producing body, chassis, exterior, seating, powertrain, electronic, active driver assistance, vision, closure, and roof systems and modules, as well as vehicle engineering and contract manufacturing. The Company has over 320 manufacturing operations and approximately 100 product development, engineering and sales centers in over 30 countries. It provides a range of body, chassis and engineering solutions to its original equipment manufacturer (OEM) customers. It has capabilities in powertrain design, development, testing and manufacturing. It offers bumper fascia systems, exterior trim and modular systems. It offers exterior and interior mirror systems. It offers sealing, trim, engineered glass and module systems. It offers softtops, retractable hardtops, modular tops and hardtops.


MARKET CAP: PASS

The first requirement of the Cornerstone Growth Strategy is that the company has a market capitalization of at least $150 million. This will screen out the companies that are too illiquid for most investors, but still include a small growth company. MGA, with a market cap of $18,165 million, passes this criterion.


EARNINGS PER SHARE PERSISTENCE: PASS

The Cornerstone Growth methodology looks for companies that show persistent earnings growth without regard to magnitude. To fulfill this requirement, a company's earnings must increase each year for a five year period. MGA, whose annual EPS before extraordinary items for the last 5 years (from earliest to the most recent fiscal year) were 3.38, 4.44, 4.72, 5.16 and 5.84, passes this test.


PRICE/SALES RATIO: PASS

The Price/Sales ratio should be below 1.5. This value criterion, coupled with the growth criterion, identify growth stocks that are still cheap to buy. MGA's Price/Sales ratio of 0.44, based on trailing 12 month sales, passes this criterion.


RELATIVE STRENGTH: FAIL

The final criterion for the Cornerstone Growth Strategy requires that the Relative Strength of the company be among the top 50 of the stocks screened using the previous criterion. This gives you the opportunity to buy the growth stocks you are searching for just as the market is embracing them. MGA has a relative strength of 47. This does not pass the final criterion. As a result, this methodology would not consider the stock even though it passed the previous three criteria.


Watch List

The top scoring stocks not currently in the Hot List portfolio.

Ticker Company Name Current
Score
THO THOR INDUSTRIES, INC. 62%
TJX TJX COMPANIES INC 50%
SKX SKECHERS USA INC 48%
SBCF SEACOAST BANKING CORPORATION OF FLORIDA 46%
UTHR UNITED THERAPEUTICS CORPORATION 43%
TOL TOLL BROTHERS INC 41%
EGBN EAGLE BANCORP, INC. 41%
HIBB HIBBETT SPORTS, INC. 40%
SCHW CHARLES SCHWAB CORP 40%
WDFC WD-40 COMPANY 40%



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