The largest US-listed companies against each name's buy target: the price at which its EV/EBIT reaches the cheapest fifth of its own valuation history. One rule, no hand-set discounts.
buy line = 20% %ile
51 scanned · 38 valued
3 names at a buy — META, MA, PG.
30 more are richly valued vs their own history. Financials are valued on P/B and cyclical/high-growth names on normalized (median-margin) earnings — same percentile rule, different lens. ADRs (TSMC, ASML) are now folded in: their EV/EBIT is rebuilt in home currency, FX-converted, and the target handed back as a USD ADR price. The remaining 13 still can't be valued: extreme-growth names whose earnings inflected too hard even after normalizing (Nvidia, Tesla, AMD), class-dimensioned shares (Visa, Berkshire), and recent IPOs/spin-offs without a decade of history (Arm, GE Vernova, Palantir). A BUY is a signal, not an executed trade — Stage-2 diagnosis and staged entry still apply. 1 would be actionable on price but a value-trap disqualifier fired — vetoed, not buys (MSFT).
How the buy price is set. Buy target = the price at the 20% percentile of a name's own EV/EBIT history — the level it has traded at or below only about a fifth of the last decade — priced on today's earnings, so the target rises as the business grows. No hand-set discount: the single knob is that percentile. Financials use the same rule on P/B; erratic-EBIT growth/cyclical names use it on normalized (own median-margin) earnings. A strict owner-earnings DCF is shown as a deeper "floor" for scaling in — but only when it actually sits below the buy target (for strong cash generators it lands above and is hidden). FLAGGED = the price reached actionable territory but a deterministic value-trap disqualifier fired (F-Score ≤ 3, Altman Z < 1.8, Beneish M > −2.22, multi-year ROIC/revenue decline, heavy dilution) — the buy is vetoed pending human Stage-2 review. * No value = no usable lens (extreme-growth, class-split shares, recent IPOs) — priced on dislocation + quality gates.
Glossary — what the acronyms and terms mean
- P/B Price-to-Book
- Share price vs. the accounting value of the company's assets minus its debts. Used for financials (banks, insurers), whose assets are mostly financial and marked near real value.
- EV/EBIT Enterprise Value / Earnings Before Interest & Taxes
- EV = the cost to buy the whole business (market cap + debt − cash). EBIT = operating profit before interest and tax. Together: how expensive the business is per dollar of operating profit — like a P/E, but debt-aware. This is the default valuation lens here.
- ADR American Depositary Receipt
- A US-traded, US-dollar stand-in for a foreign company's shares (e.g. TSMC, ASML), so it can be bought on a US exchange.
- FX Foreign Exchange
- Currency conversion. For ADRs, the valuation is built in the company's home currency and then FX-converted into US dollars.
- USD US Dollars
- The reporting currency for every target price shown on the board.
- IPO Initial Public Offering
- When a private company first sells shares to the public and starts trading. Recent IPOs lack the decade of history this method needs.
- Normalized (median-margin) earnings
- Profit smoothed to the company's typical (median) profit margin, so one freak good or bad year doesn't distort the valuation. Used for erratic-EBIT growth/cyclical names.
- Percentile rule
- Ranking today's valuation against the name's own past — e.g. the buy line is the price at which it's cheaper than ~80% of its own history.
- Cyclical
- A company whose profits rise and fall with the economy (automakers, chipmakers, industrials).
- Spin-off
- A new standalone company split out of an existing one (e.g. GE Vernova from GE) — so it has little independent trading history.
- Stage-2 diagnosis / staged entry
- The follow-up process after a BUY signal: a deeper check (is the cheapness temporary or a real deterioration?) before buying in gradually rather than all at once. A BUY is a signal, not a trade.