Welcome to Stock Spotlight!
While writing on this site, I found myself drifting towards writing mostly about stock valuations. So, in order to maintain high-quality content on my primary outlet, I decided to start this newsletter to allow myself the freedom to write about whichever company I wanted.
Here’s What Stock Spotlight is All About:
Each week I will pick a company to analyze. I will then screen the company by using Warren Buffett’s Four Investing Principles. If you are unfamiliar with what Warren Buffett looks for in a company, then you can check out my article on it here.
Here are Buffett’s Four Investing Principles:
- A business that we can understand
- A business that has favorable long-term prospects
- A business that is operated by honest and competent people
- A business that is available at an attractive price
Pretty simple, right? By using this template, we will come out on the other side of each analysis knowing:
- An understanding of the company’s business model
- Whether the business model is sustainable or deteriorating
- If the management is producing or destroying value for shareholders
- The company’s valuation
After going through these four principles, I will assign the stock a score depending on how well it screens through the principles. The perfect company will have a score of 4/4, while poor companies will have 1/4.
For the valuation, I will use my own Discounted Cash Flow (DCF) model. While not every company should be valued the same way, I view the DCF model as the gold standard for any stock valuation.
To round out the report, I will also include an article or two that I think are worth checking out, as well as a music recommendation to give you something to listen to while doing your own research.
I view this newsletter as a tool to continue seeking out opportunities, while providing readers with some entertainment. Hopefully I can provide you with an idea or two!
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