Quality on sale
Quality compounders trading at or below our fair value estimate.
Great businesses are rarely cheap; when one trades below fair value it is usually because of a temporary scare. This is the overlap of the quality compounders list with a margin of safety.
$10,000 in this list since 2016
Rebuilt every month from the data public at the time
- Per year
- +15.6%
- All stocks +9.4%, S&P 500 +13.8%
- Worst fall from a peak
- -39%
- All stocks -35%
- Months ahead of all stocks
- 52%
- 120 months tested
- Stocks held, on average
- 19
- Equal weights
- Past 12 months
- +11.8%
- All stocks +4.1%, S&P 500 +12.4%
- Volatility, per year
- 22%
- All stocks 22%
- Sharpe ratio
- 0.66
- All stocks 0.40; return over cash per unit of volatility
- Replaced each month
- 22%
- Share of the list that changes at a rebalance
Live since Oct 19, 2026. Holding the list as published, rebought at each month end: +1.6% against +2.1% for all stocks and +0.7% for the S&P 500, to Oct 30, 2026. Too short a period to read much into.
- Quality on sale
- All US stocks, equal weight
- S&P 500 (price only)
Year by year
| Portfolio | 2016from Oct 31 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026to Oct 19 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| This list | +3% | +40% | -10% | +47% | +46% | +26% | -32% | +57% | +10% | -2% | +5% |
| All US stocks | +12% | +19% |
39 stocks on the list today
As of the close on Oct 30, 2026; 3 joined and 4 left since Oct 29, 2026
| # | Company | Share price | 1D | Market cap | Margin of safety | ROIC 5Y | Gross margin | FCF margin | P/E | From 52W high |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | $12.29 | −5.9% | $5.8B | +72.1% | 25.2% | 76.9% | 28.9% | 14.6× | −75.6% | |
| 2 |
Left the list at the latest update
More quality ideas
- Quality compoundersBusinesses that have earned 15%+ on invested capital for five years while growing and staying lightly indebted.
- Rule #1 (the 4Ms)Phil Town's four Ms: meaning, moat, management and margin of safety, measured with the Big Five growth rates.
- Top scoresCompanies that pass at least 22 of the 30 checks behind the StockData Score.
A list produced by rules, not a recommendation. Past results in the backtest don't predict future returns. How the backtests work.