I’ve spent a considerable amount of time over the last couple days foraging for companies that meet my requirements for good earnings growth, good return on equity, low price to book values, low earnings multiples, selling for cheap.  I’m looking for predictable earnings.  I’m looking for good prices.  I’m looking for value.  I suppose I’m thinking about what Warren Buffett might think.  I’m thinking about the general attractiveness of the companies.  I’m thinking quantitatively and qualitatively.  Very few of these stocks come close.  Only a couple meet my requirements…even considering the brutal 2016 market downturn.  Expected stock price increases are not enough.  Beating the Dow isn’t enough.  I need to significantly beat the Dow to make investing worth my time.  So the expectation is to beat the Dow on average by 10%, to beat the Dow soundly during down years, and to keep up during bull years.  I’m using one analysis here, and I’ll always reserve the right to reconsider when I have more quantitative tools at my disposal.

JPM-JP MORGAN CHASE AND CO–Closed today at 57.34.  P/E is 10.06.  P/B is 1.01.  Book per share is allegedly 66.75. Revenue is down from last year.  Book value grows at 6%.  Growth is expected at 8%.  Return on equity is allegedly 10%.  They have 145% long term debt to equity.  They are a great bank and a great business.  Their figures are a bit misleading…maybe book value per share is out of date?  (I see I was right…book value is more like 57/share). Historical return on equity, if I’m generous, is at an average of 8 for the last 10 years.  Growth is OK.  I’m not aware of a catalyst to make em’ spike.  If I use the equity as a bond calculus book value is 57, growth rate of 9, splitting the difference between historical and current return on equity, in 10 years book value may very well be 134.94 per share.  In order to get a 15% return based on current share price, I’d have to pay  a price of 56/share.  Also need to take into account that these figures are somewhat skewed by the fact that banks need a ton of equity and by the fact that banks have their hands tied on their investments.  I think Jaime Dimon is great.  Chase took a lot of stress on their shoulders in 2008.  Short interest is at .78.  I don’t like how much Jamie Dimon gets paid though…north of 20m.  I put an alert down for the price of 55.  It looks like a long term buy and hold.  UPON REVIEW: P/e is 9.52.  Dividend is 1.76 per share.  EPS is at 5.99.  Dividend is at about .29% of EPS.  Dividend would be at about 14.12 after 10 years.  With that r on e of 8 and with a book of 57, we’d be looing at a book of about 99 per share in 10 years (using 5.68 as our growth rate).  And thus we’d have EPS of 7.92.  And thus a share price of, maybe 80.  Plus that After tax dividend of 14.12.  We’d be at a 5.13% rate of return.  With this math, they’d have to come down to 23 for my 15%.  I’ve been pretty conservative here.  On the high end, we’re looking at 123 of book, and thus 9.84 EPS x p/e of 10: thus a price of 98.4 plus the dividend.  On the high end, I’d need to have a price of 27.

WMB-WILLIAMS COMPANIES INC-this is an energy company…and their stock has been tanking for the past few days.  Things are bearish for them in a big way but why?  They dropped 17% today.  Their stock price is at 13.61. P/E is 36.76.  Price to book is 1.53.  Book value is allegedly 9.86 per share.  Looks like their earnings sucked big time in 2015 down 82% from the previous year. Earnings are subject to high hopes for the next year at 67.12.  Book value growth has been stagnant .  Return on equity this past year is 4%?  They have 295% debt to equity.  Historical return on equity is pretty spotty…big fluctuations from -14 to 30…I wouldn’t feel comfortable going anything more than 12 as an average.  Reasonable price would be something like 12.  And they are in that range, but what’s the deal here?  It looks like there is a question over a merger with Energy Transfer Equity.  It looks like the market is freaking out over cheap oil and stagnant manufacturing growth.  This stock is getting killed.  They also just had a reduction in credit worthiness to Ba1..junk status.  So doesn’t sound like they’ll be able to get a loan to buy ETE.  Looking at their earnings history they are really in the dumps.  Oh, wow.  It looks like that ETE deal fell through because they couldn’t get the financing….they’ve been in a tailspin since the merger fell apart.  It looks like Williams has a 30b backlog in business, and it looks like the merger was going to happen at a value of 43b…Their current market cap is 12.4.  Going back, it looks like when this company got in some trouble way back, warren buffet gave them a loan.  It looks like the ETE deal may still be on the table.  So, their earnings are inconsistent; there may be an arbitrage opportunity…a significant one.  Well…it looks like there is some serious manipulation happening here.  This is not a long term value deal.  They are also clearly a commodity type business.  So it looks like they also have exposure to chesapeake 20% of their revenue…and looking at chesapeake…they are a trainwreck.  I’m looking right at the heart of this oil price crisis.  Chesapeake has like 850+% debt to equity.  They have like .3 price to book, but they are hemmoraging money, and can’t earn anything.  Chesapeake is going down.  BTW Williams has no serious short interest, and they have a 15% dividend?  Chesapeake’s short interest is 36%.  So the question is: do i speculate that the super cheap Williams Companies will put out of this tailspin and (a) get acquired, (b) count on it’s sheer outrageous value to pull through the tide?, or do I say nope?  This is a tough one.  I’ll watch.  I’ll put a price alert on for 10.  It’ll probably bounce up…but that would be speculation.  I’d buy as part of a group with a target of 1-2 years or 50.  UPON REVIEW, they are now selling at 16.1.  Short interest is at 1.6%.  P/E is now at 35.  Dividend is at 2.56.  (Given their Chesapeake exposure, I will reduce rate of returns by 25%.  Analysts are still bearish.  Book is at 9.86, for EPS of .46.  Earnings growth is supposed to be exponential.  Let’s see.  So their dividend after 10 and tax is at 22.  Book could very well be at 41.  And with a return of 5, their earnings could very easily be at 2.05…and so with their insane p/e of 30 less ten and thus 20, they could be valued at 40, plus that dividend (which according to my calculus, would need to be cancelled) at 62.  So, the deal is that if they can stay in business, they’ll give me a great return on equity…and probably even better than that short term given the arbitrage possibilities.  I’ll set a price point for their 52 week low of 12.77.  If they come back down, I’ll take the risk given the extreme value and the relative 16% dividend.

CMG-CHIPOTLE MEXICAN GRILL INC-Now here’s a personal favorite of mine.  AWESOME product.  To my knowledge, the best fast food restaurant in the U.S.  They had almost 2000 stores as of the last annual report.  They are trying to open restaurants in other countries, and I think they worry about what their success with that endeavor will be?  What’s a Mexican Grill–they’ll say in Australia I guess.  They still have room to grow in America and Canada?  What’ll they call it in Mexico?  A Mexican American Grill?  Anyways, they’ve been clobbered by this ecoli/nonovirus scare.  Their earnings are down by half…justified?  Based on reason?  Ha.  Prolly not.  Market cap is 12.61.  P/e is 24.12.  Book value is something like 76.99 per share. Their stock bounced 6 percent today.  Long term earnings growth is expected to be 15…and I believe em.  Book value per share growth is 23.39. Return on equity is 24%.  They have no debt.  Their earnings estimates are down by like 50%…but they’ll come back.  So: going back to their book value 76.99, r on e is 24.  Their book value may very well be in the 661 range in 10 years, and in order for my share price to get a 15% return it would need to be in the 275 range.  I think their stock is gonna pop tomorrow.  I really do.  They are already starting on their media campaign.  I just think it would be speculative to buy their price for more than 350…and that’s probably giving them some serious lee-way.  Watch list at 400.  I’d go long.  UPON REVIEW,  this stock has shot up this week on people expecting the battered stock to rise up again.   They are selling at 475.94 now, with an 8.16 short interest.  P/E is at 28.4.  Currently that’s 16.72 EPS.   Earnings are gonna be down this year. Return on equity historically is like 23, but let’s give em a 25 haircut because of this ecoli business.     And so that gives them a book of 402, and EPS of 72.36.  And with that 20 p/e, that’s a share price of 1447.2.  That’s a 11.78 rate.   I stick by my presious assessment.  They’d be a good buy for 350.

UVE-UNIVERSAL INSURANCE HOLDINGS INC-These guys write some nasty policies and these guys are dicks to their insureds, or at least they are using all the most aggressive ways to keep their insured’s money in their pockets.  Analysts love it. Market cap is $755m.  P/E is 7.18.  Price to book is something like 2.1, which is high for insurance.  Book value is something like 7.94 per share.  Earnings growth is good…no estimate for next 3-5 years.  Book value growth is 12% per share.  Return on equity is 40.  Debt to equity is 8.6.  They have a share buyback program going on…I read one of their proxy statements yesterday.  They have a compounded earnings per share growth rate of a whopping 23.12 percent!  Wow.  Nice company.  Consistenly high return on equity.  Let’s go with a 23 percent rate for our equity coupon calculations.  It looks like $25 per share would be a great price for this company.  This company is a buy.  They also have a 2.44 percent dividend. There is also a 20% short interest?  What’s the deal with that.  Right now they are selling at 18.41 per share.  I’ll set an alert for 17.5.  These guys write homeowner polices in Florida?  Whoa…that’s something.  Wow 16.8 insider ownership.  I’m getting a discount in my opinion even if I buy it now…honestly I’m being greedy.  It would be bought as part of a group.  UPON REVIEW, they have a .56 dividend, and thus we’d be looking at 4.67 after tax and 1o.  EPS is 2.739.  Thus the dividend is at .2%.  There has been a lot of short selling interest.  And there has been a lot of fluctuation.  Rumors of CEO trouble and fraudulent claims practices.  Let’s say they grow their book at 12%, that gives them book of 24.66.  And I think this fairly accounts for risk of hurricanes.  That gives them EPS of 2.96.  and with P/e of 9, that’s a share price o 24.21 plus dividend of 4.67, we’ll call it 29. I’ll buy this junk at 10-12.

MKL-MARKEL CORP-a favorite of mine.  2.7% insider ownership.  11.7 cap.  P/E 23.92.  Analysts are severely bearish.  Book value per share is 551.63 price to book is 1.54.  Book value per share the last 5 years is 22.31. Return on equity last year was 6.5.  .29 debt to equity ratio.  Earnings growth next 3-5 is 10%.  Earnings growth for last 10 years doesn’t look impressive.  Return on equity is always something like 5 or6.  People have run this stock up too high.  If it comes down to 650 I’ll buy…and that’s with significant numbers fudging.  I’d go long.  No need to re review.  I agree with the price point.

BRK-BERKSHIRE HATHAWAY INC-I’m looking at the B stock.  Analysts are neutral.  When Munger and Buffett pass away, the stock is gonna tank short term.  P/E is 13.94.  Price is 126.25.  Book value is about 100.72 per share.  Book value growth is at about 13%.  Earnings growth is an optimistic 8.8.  Return on equity is 9.3 this year.  Historically, actually kinda impressive.  Buffett says he’ll buy at 1.2 book value.  So, I’d pay 108 for this stock, even with the risk of Buffett/Munger demise.  I’d go long.

ABCW–ANCHOR BANCORP WISCONSIN INC-a weird business…unimpressive earnings, except every once in a while they post a quarter with extreme earnings.  Cap is 423.  Shares selling at 43.  Price to book is 1.45.  They are a little savings and loan in wisconsin.  They are weird and inconsistent.  I don’t think their earnings can be safely predicted.  Whoops looks like they are getting acquired at 48.5.  I don’t know when their close date will be…that could prevent this from being a profitable arbitrage.  Let’s see if it drops.  Price watch set for 35.  Don’t really like this stock though.

D-DOMINION RESOURCES-Eps growth 3-5 years 6%.  Book value growth last 5 years .65.  Return on equity 14.7%.  Price 69.  Book value 21.16.  I’d buy it if they were charging 40.  They are an energy producer/transporter. Part of a group.

VLO-VALERO ENERGY CORPORATION-they always pop on Graham stock screeners.  They have 44.14 in book per share.  They have a market cap of 34.2b.  Share price of 65.03.  Earnings growth projections are great like 11%.  Earnings this year were great.  Earnings are not predicted to be great this coming year.  Their stock is sucking cuz of this oil fiasco lately.  Book value growth per share is 7.  Return on equity is 23.  .34 debt to equity.  Looks like they are run well, but they are in a shitty cyclical business.  What does munger say?  Between good management and a shitty industry, it’s the industry that wins?  Analysts LOVE it. This company will survive the the oil downturn and they will cleanup when oil comes back.  Insiders are in on it.  Good return on equity.  I would feel comfortable giving it a 17% return…These guys must be engaged in share buybacks.  They are just a commodity producer.  I’d buy em at 55, and that’s my alert.  Maybe.  Part of a group.  UPON REVIEW, they pay 2 in dividends. P/E is at 7.  EPS are 9.54.  After 10 and tax, 17.51 in dividend.  Let’s say they grow their book at 13.6, we could be looking at book of 190.3-less 20 for capital expenditures. We’d be looking at EPS of 28.9 for a share price of 202.  Plus 17.51 in dividends.  I’ll reiterate by 55 buy point.

INTC-INTEL CORPORATION-Price is 31.91.  Cap is 154.22b.  Price to book is 2.75.  Book is like 12.26 per share.  It would be foolish for me to guess at what the future holds for these guys.  I’m comfortable looking at them as a commodity producer.  Book value growth past 5 years is 6%.  Projected earnings growth 8%.  They are coming off a good year with 11% growth.  Return on equity last year was 20.34.  .35 debt to equity.  They pay a 2.94% dividend.  They are midway between 52 week highs and lows. Compounding earnings growth over the last 9 years is 11.17%.  Historical return on equity is awesome averaging like 19-20 over the last 10 years.  If they came down to 20, I’d buy and hold long.  UPON REVIEW, Boy o boy, they tanked on Friday.  They are selling at 29.76, with a p/e of 12.71 and EPS of 2.34.  They pay a dividend of .96.  Which is about 41% of earnings.  They are down 17.7 over the past 52 weeks and they are still above their 52 week low of 24.87.  After 10 and tax, we can expect a dividend of about 8.17.  And with their rate of return equity, accounting for dividends, we would be looking at say 38.08 and an EPS of 3.80.  And thus with that 12.7 p/e, we’d have a price of maybe 48.26 and the dividend of 8.17.  A lousy 6.61. I’ll keep my price poat 20, but it should really be at about 15.

EMR-EMERSON ELECTRIC CO-I have the lowest opinion of this company…always the cheapest products.  Is that based on reason?  Cap is 28.8.  Book per share is 12.34.  Long term growth is 6%.  Book value per share growth last 5 years is -3.7. Return on equity is a consistely high 30.  Historically sometimes a bit lower.  .5 debt to equity ratio. Earnings are sorta rocky, and they got hit hard by the recession. I would consider buying them at 28 for a pool of value companies.  UPON REVIEW, they have a huge dividend  1.88.  After 10 and tax, we could call it 17.51.  and that is a significan portion of the 3.99 EPS this year.  With a P/E of 10.  With that Return on equity in the 30 range, we can only compound equity at 53% of the 30, lets call their book in 10 54.5.  Let’s say they have a 30% return on that: we have EPS of 16.35.  And thus a price of 163.5 plus 17.51.  We have an actual contender here with growth of 15.43 Let’s see what do these people actually do.  I’ll increase their price point to 40, 38, 36, 35.