Only one stock passes the 52 Week Low Screen this week – but that is one more than usual these days:
| Ticker | Price | Fair Value | Margin of Safety | Yield % |
| WSM | $47.52 | $73.00 | $25.48 | 3.1% |
Click on the link to research further.
Williams-Sonoma still looks interesting – so I have drilled deeper into their books – and am not happy with the cash flow situation:
- Morningstar – Cash Flow Statement.
You can hide a lot in Financial Statements, but you can’t fake cash flow – so the fact that they seem to have less cash on hand each year worries me. I am also concerned with retail in general, given the Amazon Effect – but WSM seems to have a good on-line presence.
Bottom-line, this is a good company with a solid dividend and many high-profile brands, such as Williams-Sonoma, Pottery Barn, and West Elm – but I would need a significant Margin of Safety to make a play. If the stock falls below $45.00 a share – I might sell some puts to start accumulating shares.
52 Week Low stock picks are based on the following screen:
- Morningstar analysis available.
- Less than 5% above its 52 week low.
- Greater than or equal to Narrow moat.
- Free cash flow/enterprise value greater than 5% (should be above what the 10 Year Treasury Bond is yielding).
- Financial Health Grade >= B.
- Forward P/E <= 20.
- Stock Industry not = Asset Management
- Dividend Yield % >= 2.5
- For candidates that have passed all the filters, review the individual stocks Return on Invested Capital (ROIC) for the previous 10 years to select the best long term candidates.
Extra: Timely article from Bloomberg:
- Bloomberg – Why Can’t You Get a Big Raise Anymore?
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