Quality Value Investing

The Value Road Less Traveled

David J. Waldron — Tue, 01 Sep 2026 14:03:32 GMT

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My renewed approach to investing, primarily focusing on a company’s current wealth and the present value of its stock, transformed me from an underperforming, nearsighted stock trader into an alpha-generating, far-sighted company investor.

Quality Value Investing (QVI) uses proprietary analysis to uncover fundamental investment opportunities. Its goal is to inspire readers to build and maintain portfolios of shares in quality companies purchased at value prices.

For some background, in early 2008, during the Great Recession-induced bear market, I transitioned to bottom-up value investing after several years of struggling with top-down growth investing.

To alleviate my frustration, I began modeling my guiding principles on those of legendary investors Warren Buffett, Peter Lynch, Howard Marks, and Charlie Munger. I made alpha-generating stock picks driven by the collective wisdom of these influential investors, which became the foundation of Quality Value Investing.

As a result of my investor reinvention, my 64 published stock picks since then — predominantly dividend-paying common shares in high-quality enterprises — have generated alpha by outperforming the S&P 500 Index, as measured by the equal-weighted average total return across holdings over the same periods since inception.

Thus, I have discovered firsthand how quality-focused, value-driven investing prevails across market cycles.

This Quality Value Investing (QVI) post is free for two weeks from publication.

An audio voiceover is available in the Substack app for iOS and Android.

Available for iOS and Android

Welcome to my investment website, Quality Value Investing (QVI). To access the full text and audio of the QVI archives, become a premium subscriber.

QVI’s Checklist-Driven Approach

My proprietary, checklist-driven stock-picking strategy generates an actionable investment thesis summarizing why I rate a researched company and its stock as a buy, hold, or sell.

For example, the easy-to-read research reports in the QVI newsletter archive examine the targeted company’s current wealth, including its value proposition or competitive advantage, its business fundamentals or returns on management, and its downside risks.

Next, I determine the stock's present value by analyzing valuation multiples to estimate its intrinsic value and identify downside risks to the share price.

As such, I gravitate toward facts for a more profitable approach to private investing, prioritizing real-time quality and value over speculation.

The current wealth-and-present-value stock-picking strategy rejects myopic trading schemes, unreliable predictive analysis, and excessive business modeling, which are typical of the financial services industry’s penchant for generating advisory or subscription fees rather than portfolio alpha.

Quality value investors avoid controversial, unproven investment vehicles that promise quick financial gains, even though those gains are improbable and the vehicles have limited utility.

I discovered that do-it-yourself private stock investors can beat the market or achieve their investment goals over time by adhering to a simple menu of time-tested, winning investment principles, strategies, and practices.

I learned to stop placing bets on faceless stocks and instead invest in the common shares of exceptional businesses.

This foundational concept of investing in equities allows willing participants to take affordable partial stakes in publicly traded companies. That approach remains ideal for private investors seeking to build a portfolio of winning stocks from enduring enterprises.

Private investors often build portfolios to finance life’s essential milestones, such as buying a home, paying college tuition, sponsoring a wedding, underwriting a hobby, starting a business, or enjoying a comfortable retirement.

Quality Value Investing helps readers keep stock picking simple by focusing on current wealth and present value rather than speculative future share prices and business growth targets.

Together, we’ll practice and master the behavioral arts of rational thought, discipline, and patience to take advantage of the magic of compounding, protected by wide margins of safety, to fund those milestones.

Quality Value Investing filters out the noise to provide actionable insights for subscribers’ stock portfolios.

Consider upgrading to a premium subscription to benefit from QVI’s investment strategies, research reports, and alpha-generating picks.

The Mission of Quality Value Investing

Although Quality Value Investing welcomes every interested reader to participate and benefit, the newsletter serves the following investor profile best:

Private investors who are curious about or favor the quality-focused, value-driven investing strategy of buying shares of excellent companies when their stock prices are temporarily discounted and holding these positions for as long as the business and investment theses remain intact. They look to open or maintain personal brokerage or tax-deferred accounts and need inspiration to manage their portfolios independently. Furthermore, they desire an accessible, value-added, timeless newsletter to pursue lower-cost, lower-risk investing across market cycles.

The Quality Value Investing newsletter archive consists of published research reports on winning stocks of enduring enterprises, applying the actionable principles, strategies, and practices discussed throughout QVI’s posts.

Ongoing reference resources in the archives include the QVI Stock Picks Real-Time Performance Tracker of the 42 active components, plus the 22 Good Ideas at the Time of formerly covered stocks that remain tracked for transparency.

The QVI Research Reports Archive includes the most recent coverage of the 42 active components. For further reference, the QVI Research Report Format Guide provides the checklist template used to screen, analyze, and accept or reject each pick.

The Glossary of Investment Terms and Metric Targets provides subscribers with an index of investment terms found throughout the QVI research reports. It gives subscribers concise definitions of the data-driven content for easy reference.

Links to these resources can be found at the end of this article.

Readers may notice recurring themes throughout the QVI articles and research reports. As a former executive in postsecondary education, I can attest that mastering a subject or skill requires thousands of hours of repetitive learning and hands-on practice. Quality value investing is no exception to this rule.

I appreciate your interest in QVI. Please read the important disclosures and disclaimers before beginning or continuing your journey toward financial independence through quality-focused, value-driven investing.

Resources

The following archived posts provide an in-depth look at Quality Value Investing’s investment research checklist, which has identified 64 stocks that have collectively outperformed the S&P 500 benchmark since 2008, as of this article's publication date.

That’s right, an average of just three to four stock picks a year: a value investing road less traveled.

What are your thoughts on using a checklist-based approach to researching a company’s current wealth and the present value of its stock price that has consistently produced long-term portfolio alpha for the QVI stock picks?

Disclosure: I curated this post myself and share my own opinions. I receive no payment for it other than Substack paid subscriptions. I have no financial connections to any company whose stock is mentioned in this post.

Additional Disclosure: Quality Value Investing by David J. Waldron’s articles and primary ticker research reports are for informational purposes only. The accuracy of the information and data cannot be guaranteed. The narrative and analytics are not personalized and are not intended for portfolio creation outside the QVI Stock Picks, which are provided solely for educational purposes. David is a private investor and author, not an investment advisor. Readers should conduct their own research or due diligence and, as needed, consult a fee-only certified financial planner, a licensed discount broker-dealer, a flat-fee registered investment advisor, a certified public accountant, or a specialized attorney before making any investment, income tax, or estate-planning decisions.

A Successful Investment Journey Favors the Prepared

David J. Waldron — Fri, 10 Jul 2026 14:26:37 GMT

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This Quality Value Investing (QVI) post is free for two weeks from publication.

An audio voiceover is available in the Substack app for iOS and Android.

Available for iOS and Android

Like airline pilots during takeoff and landing, quality-focused, value-driven investors use checklists to ensure they perform the due diligence necessary for long-term portfolio safety and success, ultimately reaching their destination.

A checklist approach to stock picking emphasizes a rigorous yet straightforward methodology for researching and analyzing a company’s business model to determine its current wealth and the share price to measure its present value.

Checklist-driven investment research has contributed to the QVI Stock Picks’ verifiable market-beating performance since 2008.

For example, as of this article’s writing, the QVI Stock Picks Real-Time Performance Tracker has generated alpha on an average-per-holding, equal-weighted basis since inception relative to the S&P 500 Index benchmark.

Please don’t take my word alone for the positive impact of using an investor checklist. The investing universe’s most recognizable names use a checklist approach to researching and analyzing stocks likely to outperform their target market benchmarks.

Superinvestors Bill Ackman, Warren Buffett, Benjamin Graham, Tony Kynaston, Charlie Munger, Mohnish Pabrai, and Guy Spier are among the household names often cited for using a checklist approach to achieving portfolio alpha.

This article summarizes my market-beating investment checklist, which I use to curate the QVI primary ticker research reports.

Readers can use the template to develop or enhance their unique investment research methodologies.

Quality Value Investing filters out the noise to provide actionable insights for subscribers’ stock portfolios.

Consider upgrading to a premium subscription to benefit from QVI’s investment strategies, research reports, and alpha-generating picks.

Upgrade My QVI Subscription

Checklist-Driven Investing Defined

An investment checklist for researching and analyzing stocks, exchange-traded funds, or other financial products can help ensure we conduct the necessary due diligence to support sound decision-making for the long-term success of our portfolio.

Airline pilots must perform a mandatory checklist of items before takeoff from the departing airport, before final descent to the arriving airport, and again before landing.

Although airplanes crash more tragically than markets or portfolios ever could—thankfully, the occurrences are rare in each case—it is fair to presume that we should choose investments to build portfolios by navigating a prescribed checklist of urgent items, as we have come to expect from the pilots who fly us to our travel destinations.

Sample Investment Research Checklist

My proprietary list of essential metrics, developed over the past 18 years, is shared for educational purposes.

QVI’s preferred metrics have led to an alpha-achieving basket of stock picks chosen for their high-quality business models and value stock prices at the time of portfolio inclusion.

Quality Stock Selection Objective

Buy and hold the common shares of U.S. exchange-traded, predominantly dividend-paying, well-managed, financially sound businesses that produce easy-to-understand products or services, have enduring competitive advantages from economic moats, enjoy abundant free cash flow, and are trading at a discount to the perceived intrinsic value at the time of purchase. Then, of utmost importance—and perhaps the most significant challenge—practice patience in waiting for the investment thesis to play out as projected over a long-term horizon.

Remember that many online brokerages and financial sites provide accessible metric calculations for the equity investment research checklist illustrated below. Therefore, we need not worry about mastering the formulas.

Company Current Wealth Checklist

QVI limits due diligence to a company’s current financial health rather than relying on unreliable predictive analytics or excessive business modeling.

The following items aim to answer the crucial question: “Is this a company whose current wealth implies a quality, enduring enterprise?”

Value Proposition

The value proposition outlines the competitive benefits that a company’s products or services offer to customers compared to those of its rivals in the industry or sector.

A company profile provides a concise description of the enterprise and its offerings, including products and services. Do we understand the business model? Is it within our circle of competence?
The stock profile favors large, mid, and small-cap stocks traded on major exchanges. QVI avoids microcaps and over-the-counter (OTC) shares, which are considered speculative.
An economic moat refers to a company’s products or services that provide a competitive advantage over other businesses in the same industry. Morningstar is the leading authority on economic moat research and credits Warren Buffett, the founder and chairman of Berkshire Hathaway (BRK.A, BRK.B), with coining the term. Alpha-rich investors target companies with clear competitive advantages. An investor can streamline the value proposition for an enterprise with a wide, narrow, or nonexistent moat.
The value proposition elevator pitch describes why we believe the target company is a high-quality, enduring enterprise in one or two sentences. Quality-focused investors eliminate companies whose value propositions are difficult to define.
Due diligence resources provide a more in-depth analysis of the all-important value proposition. For example, visit the company’s investor relations webpage and its most recent Form 10-K annual report filed with the US Securities and Exchange Commission (SEC), or the required report from the domiciled country’s financial securities oversight agency.

Returns on Management

The company’s returns-on-management checklist measures the strength of the business’s fundamentals and the performance of senior executives.

Revenue growth refers to the compounded annual growth rate (CAGR) of revenues or net sales over a specified period. When analyzing a business, QVI remains biased toward established growth rather than executive guidance and speculative sell-side analyst projections.
Gross profit margin is the company’s profit after deducting its cost of goods or services sold from total sales or revenue, expressed as a percentage.
Net profit margin is the percentage of revenue remaining after operating costs, interest, and taxes, calculated on sales over the preceding 12 months. It is crucial to focus on NOPAT (Net Operating Profit After Taxes) when evaluating profitable companies to avoid unnecessary speculation. Investors who prioritize quality favor companies with net margins in the double digits.
Return on equity (ROE) is the income available to common shareholders over at least 12 consecutive months, divided by the average equity ownership over recent fiscal periods, expressed as a percentage. It shows the profit a company generates from shareholder investments. In QVI’s research, an ROE of 15 percent or higher indicates shareholder-friendly management.
Return on invested capital (ROIC) is calculated by dividing net income after taxes by the average total equity, long-term debt, other liabilities, deferred income tax, and minority interest, and then expressing the result as a percentage. This metric evaluates how effectively a company utilizes capital to generate additional returns. QVI seeks companies with an ROIC exceeding 12 percent.
The weighted average cost of capital (WACC) represents the corporation’s cost of capital, with each category weighted in proportion to its contribution to the overall capital structure. The calculation encompasses all sources of capital, including common stock, preferred stock, bonds, and any other long-term debt. To demonstrate management’s capital allocation abilities, QVI looks for the ROIC to exceed the WACC by a comfortable margin.
QVI owners’ earnings are a further test of management effectiveness. Quality Value Investing calculates owners’ earnings by adding earnings-per-share growth or free cash flow growth to dividend rate growth. For adequate shareholder returns, QVI seeks at least 5 years of annualized positive double-digit returns.
Dividend yield reveals how much a company expects to pay in average dividends over the next 12 months relative to the current share price. Whether or not we are income-motivated investors, we should remember that dividend-paying stocks provide short-term shareholder compensation as we wait for capital gains to compound over time.
The dividend yield on a cost basis (YOC) is calculated by dividing the annual dividend payout by the cost basis of the portfolio's common shares. QVI limits high-dividend investing to yields calculated on a stock’s cost basis. Yield on cost highlights that buy-and-hold, quality-focused, value-driven investing is superior to pursuing high yields at the expense of increased downside risk. For example, as ot the date of this article, seven long-held quality stocks in the QVI Stock Picks yielded between 6 and 18 percent on a cost basis.
The payout ratio is the dollar amount of dividends divided by after-tax earnings. QVI targets payout ratios below 60 percent to ensure the company’s board of directors has the earnings and free cash flow to cover and raise the dividend, rather than the dreaded cut or elimination.

Enterprise Downside Risks

QVI’s enterprise downside risks checklist identifies and rates the safety margins of the target company’s business model.

Long-term debt coverage is calculated by dividing current assets by long-term debt. Investor, author, and Buffett mentor Benjamin Graham valued it as a measure of a company’s balance sheet liquidity and its ability to repay debt in a crisis. Ideally, the ratio should be at least 1.5 times the current assets-to-long-term debt ratio.
Debt-to-equity is a ratio that assesses a company’s financial leverage. It is calculated by dividing total assets by the difference between total assets and total liabilities — more commonly referred to as shareholders' equity. QVI’s ceiling is 99 percent, as investors should be concerned if debt approaches or exceeds shareholder equity.
Short-term debt coverage, also known as the current ratio, is calculated by dividing total current assets by total current liabilities for the same period. It measures a company’s near-term liquidity by assessing how it uses its working capital. QVI targets a current ratio above 1.00.

Founding Lifetime subscribers supporting QVI on Substack Finance receive a free, ongoing subscription as long as the service remains active, with no renewal needed after the first paid year.

Lifetime members are also eligible for a complimentary, author-personalized, case-laminate hardcover edition of Quality Value Investing (the book) when it releases later this year.

Additionally, annual subscriptions cost 50% less than monthly subscriptions.

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Stock Price Present Value Checklist

Given the company’s existing wealth, QVI’s due diligence is limited to the current stock price rather than relying on speculative, often unreliable calculations, such as discounted future free cash flow analyses and other arbitrary price targets.

The following items seek to answer the crucial question, “Does the target stock’s present value convey a temporarily discounted share price?”

Valuation Multiples

I have found that as few as four valuation multiples can estimate the intrinsic value or the margin of safety of a quality enterprise’s stock price. What is the present value of the shares?

REVENUE

The price-to-sales ratio (P/S) is calculated by dividing the stock price by the trailing twelve months’ sales per share. It gauges the stock price against revenue. Compare the price-to-sales multiple to the industry or market medians. QVI targets P/S multiples below 2.0.

EARNINGS

The price-to-trailing earnings ratio (P/E) is calculated by dividing the closing stock price by the GAAP diluted earnings per share for the past twelve months. This ratio is the inverse of the earnings yield. GAAP stands for generally accepted accounting principles. While P/E can be unreliable, QVI aims for a trailing ratio of 17 times or less, or below the industry, sector, or market averages.
Earnings yield, the inverse of the price-to-earnings ratio, shows annual earnings per common share relative to the stock price. Earnings per share (EPS) indicate the profits allocated to each outstanding share of stock. QVI aims for an earnings yield of over 6 percent, the inverse equivalent of a P/E multiple below 17.

CASH FLOWS

The price-to-operating cash flow ratio (P/CF) is calculated by dividing the closing stock price by the most recent fiscal year’s cash flow from operations per share, excluding capital expenditures. For optimal value, QVI aims for a single-digit multiple.
Free cash flow yield indicates the amount of free cash flow generated per share relative to the stock price. It is calculated by dividing the cash available after operating expenses and capital expenditures by the number of outstanding shares at the end of the fiscal period. QVI aims for a yield of 7 percent or higher, or a price-to-free-cash-flow (P/FCF) multiple of less than 15.

ENTERPRISE VALUE

Enterprise value to operating earnings (EV/EBIT) is calculated by adding a company’s market capitalization to its debt, minority interest, and preferred shares, then subtracting total cash and cash equivalents (EV), and dividing by earnings before interest and taxes (EBIT). It serves as a sentiment indicator, showing whether the market has overbought the stock (a neutral or bearish signal) or oversold it (a bullish signal). QVI aims for an EV/EBIT ratio under 15 times.

Share Price Downside Risks

When assessing downside risks to a company’s share price, QVI focuses on three key metrics that indicate the security’s asymmetrical risk-reward profile.

Beta gauges a stock’s volatility, or systemic risk, relative to the market as a whole. As a long-term investor, I use a five-year trend line and screen for stocks with a beta below 1.25, or no more than 125% of the market’s volatility. For example, the S&P 500 Index’s standard deviation remains constant at 1.00.
Short interest as a percentage of the float indicates the percentage of outstanding shares borrowed for short selling that remain uncovered. This metric, relative to the float, signals market sentiment regarding potential price declines. QVI focuses on stocks with short interest below 5 percent.
Performance versus sector and market charts a selected stock’s historical return against its peers. Investing in individual stocks should aim to outperform benchmark indices over the long term. Otherwise, it is more sensible to match the benchmark by investing in index funds rather than underperforming the market.
Catalysts include expected outcomes (confirmations) and unexpected events (contradictions) that can affect the investment thesis. They represent a “bulls say, bears say” analysis, helping to reduce bias by considering different investors’ views. Online brokerages and fintech sites provide ample information on catalysts.

Want access to the QVI Stock Picks Real-Time Performance Tracker that has generated verifiable alpha since 2008?

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Reach Your Investing Destination Safely

Relying on just the facts can build a stock portfolio that beats the market index benchmark over time.

Investing is not rocket science, a notion that the financial services industry, including investment newsletters, wants us to believe to prioritize generating advisory and subscription fees rather than the more elusive alpha.

As airline pilots rely on checklists for safe departures and arrivals, quality-focused, value-driven investors use research and analysis checklists to improve their chances of creating and managing a safe, secure portfolio of profitable stocks in enduring companies.

Future Quality Value Investing posts and reports will build on this checklist of metrics for selecting the winning stocks of enduring enterprises by emphasizing investment research into a company’s current wealth and the present value of its share price.

Resources

The following archived posts provide an in-depth look at Quality Value Investing’s investment research checklist, which has uncovered 64 stocks that have collectively outperformed the S&P 500 benchmark since 2008, as of the publication date of this article.

That’s right, an average of just three to four stock picks a year.

What are your thoughts on using a checklist-based approach for stock market research or other methodologies that consistently produce long-term portfolio alpha?

Disclosure: I curated this research report myself and share my own opinions. I receive no payment for it other than Substack paid subscriptions. I have no financial connections to any company whose stock is mentioned in this post.

Additional Disclosure: Quality Value Investing by David J. Waldron’s articles and primary ticker research reports are for informational purposes only. The accuracy of the information and data cannot be guaranteed. The narrative and analytics are not personalized nor intended for portfolio creation outside the QVI Stock Picks, which are provided solely for educational purposes. David is a private investor and author, not an investment advisor. Readers should conduct their own research or due diligence and, as needed, consult a fee-only certified financial planner, a licensed discount broker-dealer, a flat-fee registered investment advisor, a certified public accountant, or a specialized attorney before making any investment, income tax, or estate-planning decisions.

Hub Group Class A (HUBG): A Good Idea At the Time

David J. Waldron — Thu, 02 Jul 2026 14:01:45 GMT

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Hubbell Inc. (HUBB): A Leading Infrastructure Player

David J. Waldron — Thu, 25 Jun 2026 14:03:43 GMT

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Alphabet (GOOGL): Business Model and Risks Outweigh Premium

David J. Waldron — Wed, 17 Jun 2026 14:01:41 GMT

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Gildan Activewear (GIL): A Leader in Apparel Manufacturing

David J. Waldron — Wed, 10 Jun 2026 14:01:07 GMT

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Graham Holdings Co. (GHC): Incentivized By a Family Legacy

David J. Waldron — Wed, 03 Jun 2026 14:01:03 GMT

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Ferguson Enterprises (FERG): Water and Air Solutions Leader

David J. Waldron — Wed, 27 May 2026 14:01:28 GMT

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FedEx (FDX): Freight Spinoff Expected to Improve ROIC

David J. Waldron — Wed, 20 May 2026 14:03:39 GMT

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In this updated QVI Research Report, we reexamine the QVI Stock Picks industrials sector component, FedEx Corporation | | to determine whether it still qualifies for Quality Value Investing’s coverage based on our proprietary checklist analysis of the business’s current wealth and the present value of the share price.

Quality Value Investing (QVI) follows a consistent research format each week, making it easier for premium subscribers to access the most relevant parts of the reports. An audio voiceover of this post is available in the Substack app for iOS and Android.

Available for iOS and Android

The QVI buyside research report illustrates specific metrics that support the subsequent narrative in QVI’s analysis of FedEx (NYSE: FDX).

We’ll examine the company’s value proposition, management returns, enterprise risks, valuation multiples, and share price risks to curate the investment thesis.

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FedEx Corp. | Current Wealth

Value Proposition

Amdocs (DOX): B2B Services Across AI, 5G, Cloud, and Digital

David J. Waldron — Wed, 13 May 2026 14:01:49 GMT

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In this updated QVI Research Report, we reexamine the QVI Stock Picks information technology sector component Amdocs Limited | | to determine whether it still qualifies for Quality Value Investing’s coverage based on our proprietary checklist analysis of the business’s current wealth and the present value of the share price.

Quality Value Investing (QVI) follows a consistent research format each week, making it easier for premium subscribers to access the most relevant parts of the reports. An audio voiceover of this post is available in the Substack app for iOS and Android.

Available for iOS and Android

The QVI buyside research report illustrates specific metrics that support the subsequent narrative in QVI’s analysis of Amdocs Limited (NASDAQ: DOX). We’ll examine the company’s value proposition, management returns, enterprise risks, valuation multiples, and share price risks to curate the investment thesis.

Created with TradingView

Amdocs Limited | Current Wealth

Value Proposition

QVI Research Report Format Guide (Updated)

David J. Waldron — Fri, 08 May 2026 14:02:20 GMT

Master a checklist strategy that has generated verifiable stock market alpha since 2008

A Checklist For Valuing Stocks of Quality Companies

Wed, 29 Apr 2026 14:02:10 GMT

QVI’s checklist strategy has generated verifiable stock market alpha since 2008

A Checklist For Uncovering High-Quality Companies

David J. Waldron — Wed, 22 Apr 2026 14:02:35 GMT

Master a checklist strategy that has generated stock market alpha since 2008

Quest Diagnostics (DGX): Half of the Reference Lab Duopoly

David J. Waldron — Wed, 15 Apr 2026 14:00:56 GMT

Image created with AI using Microsoft Designer.

In this updated QVI Research Report, we reexamine the QVI Stock Picks health care sector component Quest Diagnostics | | to determine whether it still qualifies for Quality Value Investing’s coverage based on our proprietary checklist analysis of the business’s current wealth and the present value of the share price.

Quality Value Investing (QVI) follows a consistent research format each week, making it easier for premium subscribers to access the most relevant parts of the reports. An audio voiceover of this post is available in the Substack app for iOS and Android.

Available for iOS and Android

The QVI buyside research report illustrates specific metrics that support the subsequent narrative in QVI’s analysis of Quest Diagnostics (NYSE: DGX). We’ll examine the company’s value proposition, management returns, enterprise risks, valuation multiples, and share price risks to curate the investment thesis.

Created with TradingView

Quest Diagnostics | Current Wealth

Value Proposition

QVI’s High-Quality Universe | April 2026

David J. Waldron — Thu, 09 Apr 2026 14:02:25 GMT

Generating stock market alpha since 2008

While screening potential stock picks for Quality Value Investing’s (QVI) next idea, I decided to introduce this series of posts on highlighting the current wealth of enduring companies that meet QVI’s checklist for high-quality business models.

Did you know that premium subscribers receive exclusive access to the QVI Stock Picks, which have consistently produced collective alpha since 2008? If you're a private or professional investor looking for new ideas or perspectives, consider subscribing to access QVI’s actionable research.

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Using its current wealth screening parameters, QVI has identified 70 enduring enterprises with strong business models.

This result is similar to the last quarterly update. However, some companies dropped off from the previous update, while some new ones made the cut.

The selected companies fall within QVI’s scope of expertise, which covers Consumer Discretionary, Consumer Staples, Industrials, and Information Technology. These are the four sectors that have produced the most alpha from QVI’s multiple picks since inception in 2008.

Companies are no longer screened from the Communications Services, Energy, Financials, Real Estate, Materials, and Utilities sectors, as these sectors fall outside QVI’s circle of competence developed over its 18-year existence.

However, if an active QVI Stock Pick from an uncovered sector appears on the screen, it will be included in the High-Quality Universe.

The quality-focused screen does not include valuation parameters. For future QVI Stock Picks primary-ticker posts, I will examine present-value metrics to identify temporarily discounted stock prices for select quality companies from the list below.

Only those meeting QVI’s current wealth and present value criteria are eligible for initial coverage in the QVI Stock Picks Real-Time Performance Tracker.

High-Quality Current Wealth Screener

There were 5,568 publicly traded companies from the four sectors at the beginning of the screening.

Company Profile

Sectors: Consumer Discretionary, Consumer Staples, Industrials, and Information Technology, plus the active QVI picks from Communications Services, Financials, Health Care, and Materials.

Exchanges: Nasdaq Stock Market (NASDAQ) and New York Stock Exchange (NYSE). No over-the-counter (OTC) issues.

Market capitalization: Large- Cap, Mid-Cap, or Small-Cap (excluding microcaps).

Net results shown after the company profile screen: 843 companies.

Value Proposition

Morningstar Economic Moat: Wide or Narrow.

Value Proposition Elevator Pitch: Are the company’s products or services relatively straightforward and easy to understand?

Net results shown after the value proposition screen: 318 companies.

Returns on Management

Net Profit Margin (MRFY): Must be positive.

Return on Equity (TTM): 15% or higher.

Return on Invested Capital (TTM): 12% or higher.

Return on Assets (MRFY): Must be positive.

Cash Flow Per Share (TTM): Must be positive.

Net results shown after the return-on-management screen: 111 companies.

Enterprise Downside Risks

Debt to Equity (MRQ): below 100%. Note: QVI also assesses long-term debt coverage relative to current assets in its primary research reports on tickers.

Current Ratio (MRQ): Usually above 1.00, except for the consumer staples, financials, and healthcare sectors, due to unique accounting factors that can lower current ratios even for high-quality companies.

Owners’ Earnings (5-year EPS growth plus 5-year dividend rate growth): 15% or higher (screened last as it is manually calculated). Note: QVI also looks at 5-year free cash flow growth in its primary ticker research reports.

Net results shown after the enterprise downside risk screen: 70 companies.

Basket of 70 High-Quality Business Models

Here are the 70 businesses remaining after applying the current wealth-screening criteria to a publicly traded universe of 5,568 companies, including only covered sectors, plus the active QVI Stocks Picks in sectors no longer covered for new ideas.

Company Name | $Ticker | Industry | Market Cap | Moat

The Quality-Focused, Value-Driven Investor | Part 2 of 2

David J. Waldron — Tue, 07 Apr 2026 14:02:23 GMT

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QVI Stock Picks Review | Q1 2026

Thu, 02 Apr 2026 14:02:54 GMT

Generating stock market alpha since 2008

Audio voiceover:

Substack’s AI-generated voiceover is now accessible on Quality Value Investing. To listen, open the post in the Substack app.

Available for iOS and Android

Discover more about audio voiceovers:

https://davidjwaldron.substack.com/p/audio

In this series, Quality Value Investing (QVI) examines the 43 active QVI Stock Picks, grouped by sector, to update each component’s overall return performance since inception.

QVI’s coverage groups the primary ticker analysis by sector: communications services, consumer discretionary, consumer staples, financials, health care, industrials, information technology, and materials.

Resources at the end of the post include links to the QVI Stock Picks Real-Time Performance Tracker and the QVI Research Reports Archive.

The QVI Stock Picks as of Q1 2026

Since its inception in 2008, the 43 active QVI Stock Picks have collectively outperformed the S&P 500 by +105.49% (10,549 basis points) in average total return per holding. The outcome is based on an equal-weighted methodology, adjusted for stock splits and dividends paid, as of the market close on March 31, 2026. This performance serves as a reminder that stock market alpha is generally achieved over long-term holding periods.

Let’s review the QVI Stock Picks listed in chronological order by date of initial coverage within each sector.

Key: (Exchange: Ticker Symbol) | Value Proposition Elevator Pitch | Economic Moat (Wide, Narrow, or None) | Most Recent QVI Primary Ticker Research Rating (Buy or Hold), including Month/Year of Report | Alpha Achievement vs. S&P 500 by Basis Points (bps) since Inception in the QVI Stock Picks. | Each sector group concludes with equal-weighted average yield-on-cost and total return bps.

Communications Services Components

The Quality-Focused, Value-Driven Investor | Part 1 of 2

David J. Waldron — Tue, 31 Mar 2026 14:02:59 GMT

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DICK'S Sporting Goods (DKS): Often the Only Game In Town

David J. Waldron — Thu, 26 Mar 2026 14:03:03 GMT

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In this updated coverage research report, we reassess QVI Stock Picks consumer discretionary sector component DICK’S Sporting Goods | | to determine whether it still qualifies for Quality Value Investing coverage based on our proprietary checklist analysis of the business’s current wealth and the present value of the share price.

Quality Value Investing (QVI) follows a consistent research format each week, making it easier for premium subscribers to access the most relevant parts of the reports. An audio voiceover of this post is available in the Substack app for iOS and Android.

The QVI buyside research report illustrates specific metrics that support the subsequent narrative in QVI’s analysis of DICK’S Sporting Goods (NYSE: DKS). We’ll examine the company’s value proposition, management returns, enterprise risks, shareholder yields, valuation multiples, and share price risks to curate the investment thesis.

Source: TradingView as of the intraday market on March 25, 2026

DICK’s Sporting Goods | Company Current Wealth

Value Proposition

Applied Materials (AMAT): Global Dominance in Semiconductor Equipment

David J. Waldron — Tue, 24 Mar 2026 12:05:26 GMT

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In this initial research report, we evaluate the QVI High-Quality Universe Watchlist information technology sector component, Applied Materials, | | to determine whether it meets or exceeds the criteria for Quality Value Investing’s (QVI) alpha-generating Stock Picks based on a checklist analysis of the company’s current wealth and the stock’s present value.

This research report is from the series of posts on stocks from QVI’s High-Quality Universe Watchlist. It maintains a similar layout to the QVI Stocks Picks reports, making it easier for subscribers to find the most relevant sections. Keep in mind that only watchlist reports ending with an overall rating of “Bullish” are considered for inclusion in the QVI Stock Picks Real-Time Performance Tracker at an initial “Buy.” This report will go behind the paywall 14 days from its date of publication.

Applied Materials | Company Current Wealth

Value Proposition

Applied Materials is a dividend-paying, large-cap stock in the information technology sector’s semiconductor materials and equipment industry.

Applied Materials Inc. (NASDAQ: AMAT) provides engineering solutions, equipment, services, and software to the semiconductor industry worldwide. The company has two segments: Semiconductor Systems and Applied Global Services (AGS). Semiconductor Systems supplies equipment for processes such as etch, thermal processing, deposition, planarization, metrology, inspection, wafer packaging, and ion implantation. AGS offers solutions to improve equipment and factory efficiency, including spares, upgrades, services, and factory automation software for 200-millimeter wafers and more. It caters to semiconductor, chip, and electronic device manufacturers. Founded in 1967, the company is headquartered in Santa Clara, California, USA.

Economic Moat

Morningstar rates Applied Materials' economic moat as 'wide' due to intangible assets and switching costs. It highlights Applied Materials' expertise in wafer fabrication equipment, its sticky embedded services, and long-term customer roadmaps. The high investment needed for leading chip development creates a barrier to entry for smaller firms, favoring large, well-capitalized manufacturers such as AMAT. Morningstar expects Applied Materials to earn returns exceeding its cost of capital for the next 20 years.

QVI’s Value Proposition Elevator Pitch for AMT:

Applied Materials is a leader in semiconductor equipment, especially in deposition technology, supporting the production of nearly every new advanced chip and display worldwide.

Value Proposition Rating

QVI’s competitive advantage rating for Applied Materials is Bullish.

Returns on Management

Revenue Growth and Profit Margins

Applied Materials’ trailing five-year annualized revenue growth was 10.52%, but lagged behind the S&P 500’s median topline growth of 16.0%. In further contrast, the company’s topline grew 2.10% over the most recent 12 months, underperforming the market benchmark’s 14.80%.

The company’s net profit margin was an impressive 27.78%, while its gross margin stood at 48.72%. Its net margin exceeded the S&P 500’s median of 23.30%, driven by a gross margin of 54.0.%.

Returns on Equity and Invested Capital

Applied Materials’ senior management reported a high return on equity (ROE) of 38.86%, more than doubling QVI’s minimum threshold, but still trailed the S&P 500’s elevated median ROE of 148.30%.

Stock buyback programs often improve ROE. For example, Applied Materials follows an aggressive capital return strategy, with a March 2025 announcement of a new $10 billion share repurchase authorization to support existing plans. The company regularly returns free cash flow to shareholders through share buybacks and dividend increases, fueled by strong profits from its semiconductor manufacturing equipment.

Applied Materials’ return on invested capital (ROIC) of 28.25% more than doubled QVI’s minimum threshold and outperformed the broader market’s median ROIC of 24.70%. Additionally, the company’s ROIC exceeded its 13.57% weighted average cost of capital (WACC), indicating that its senior executives are effective at capital allocation, despite higher-than-average capital costs.

QVI’s Owners’ Earnings

In a further test of management effectiveness, the five-year trailing current wealth of owners’ earnings for Applied Materials, or EPS growth plus dividend rate growth annualized, was 32.05%, an outstanding rate of return for shareholders.

When substituting free cash flow growth for EPS growth, owners’ earnings fall to a still-respectable 23.51%.

Return on Management Rating

QVI’s business fundamentals rating for Applied Materials is Bullish.

Enterprise Downside Risks

Long- and Short-Term Debt Coverages

As reported in its fiscal Q1 2026 financial statements ending January 25, 2025, Applied Materials’ long-term debt coverage was 3.26 times, well above QVI’s minimum threshold. Thus, in a crisis, the company could cover its long-term debt three times over using its liquid assets, including cash and equivalents, short-term investments, accounts receivable, inventory, and prepaid expenses.

In further testing its leverage, the company’s long-term debt-to-equity ratio was 29.71%, indicating that less than one-third of its shareholders’ equity is needed to cover its long-term debt.

Applied Materials’ short-term debt coverage, measured by the current ratio of 2.71, was double QVI’s floor. Thus, its balance sheet indicates that working capital fully covers current liabilities, including accounts payable, accrued expenses, notes payable on short-term debt, dividends payable, customer advances, and income taxes payable.

When removing less-liquid inventory from current assets, Applied Materials’ quick ratio remains at an unleveraged 1.98.

Enterprise Downside Risk Rating

QVI’s business model risk rating for Applied Materials is Low.

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AMAT | Stock Price Present Value

Shareholder Yields

Earnings and Free Cash Flow Yields

AMAT’s earnings yield of 2.71% and free cash flow yield of 2.15% each traded below QVI’s floors.

As inverse valuation multiples, the weighted shareholder yields suggest that AMAT is priced at a premium relative to both earnings and free cash flow. QVI will explore valuation multiples further in the present value section.

Dividend Yield

Applied Materials yields a modest 0.59% dividend on a conservative payout ratio of 18.14%, leaving ample room for safe rate increases.

Average of Shareholder Yields

Next, QVI computes the average shareholder yield to assess how the stock compares with the prevailing 4.35% yield on the US Ten-Year Treasury benchmark note.

For example, AMAT’s average shareholder yield was 253 basis points (bps) below the intermediate government bond yield on its forward dividend and 215 bps below the backtested five-year yield-on-cost, based on a $124.61 closing stock price on March 23, 2021, and a current $2.12 dividend rate per share.

AMAT underperforms the intermediate bond in average shareholder yield in both the short and long terms.

Shareholder Yield Rating

QVI’s equity bond rating for AMAT is Neutral.

Valuation Multiples

Price to Sales

AMAT’s price-to-sales ratio (P/S) of 10.04 was five times QVI’s target ceiling, and above the S&P 500’s elevated 7.95 times sales.

The weighted market sentiment suggests a super premium stock price relative to AMAT’s topline.

Prices to Earnings and Operating Cash Flow

AMAT’s price-to-trailing earnings ratio (P/E) was 36.58, well above QVI’s ceiling. Additionally, it aligned with the S&P 500’s trailing median P/E of 42.10, indicating that investors value the stock at a premium relative to earnings per share.

The stock traded at a price-to-operating cash flow (P/CF) ratio of 38.12, almost four times QVI’s target ceiling, suggesting the market values it at a super-premium relative to operating cash flow.

Remember that AMAT’s free cash flow yield suggested a lofty price earlier in this report. Notably, the shares were trading at 59.4 times free cash flow (P/FCF) at the time of this research, compared to the broader market’s even more elevated median P/FCF of 123.3.

Enterprise Value to Operating Earnings

AMAT’s enterprise value to earnings before interest and taxes (EV/EBIT) was 37.54 times or 2.5 times QVI’s target ceiling, signaling that the market has overbought or undersold the stock.

Weighing the preferred valuation multiples suggests the market values AMAT at a high premium across its financial metrics, including sales, earnings, cash flows, and enterprise value.

Valuation Multiples Rating

QVI’s intrinsic value rating for AMAT is Bearish.

Share Price Downside Risks

Volatility and Short Interest

AMAT’s 60-month trailing beta was 1.61, well above QVI’s ceiling and the 1.00 standard deviation of the S&P 500, suggesting the stock trades with above-average market volatility.

Short interest as a percentage of the float on the stock was a bear-resistant 1.70%, signaling limited concern from nearsighted market pundits.

Performance vs. Market Benchmark

AMAT's total return performance of +198.75% beat the S&P 500 Index’s +69.21% over the past five years. Additionally, in an expanded 10-year backtest, the stock blew away the market benchmark's return: +1,589.03% compared to +217.50% or +137,153 basis points of alpha.

Share Price Downside Risk Rating

QVI’s margin-of-safety rating for AMAT is Below Average.

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Applied Materials + AMAT Thesis

Current Wealth and Present Value Recap

Applied Materials is a leader in semiconductor equipment, especially in deposition technology, supporting the production of nearly every new advanced chip and display worldwide.

An analysis of Applied Materials’ current financial wealth reveals a wide economic moat that supports a resilient business model. Five-year revenue growth is in the low double digits, and the net profit margin is over 27%. Returns on equity are high, indicating aggressive share repurchases.

Additionally, returns on invested capital surpass the QVI threshold and comfortably cover the company’s above-average capital costs. Its owners’ earnings are impressive, whether measured by EPS or free cash flow growth.

Furthermore, Applied Materials maintains a well-managed balance sheet, with low leverage of current assets, strong coverage of long-term debt by shareholders’ equity, and sufficient working capital to cover current liabilities. As a result, the company’s downside risks are low. Applied Materials earns a bullish current wealth rating due to its historically strong business model.

An analysis of Applied Materials’ present value indicates that its average shareholder yield underperforms the Ten-Year Treasury benchmark. QVI’s selected valuation multiples imply that shares are priced at a super premium. Share volatility is above average, whereas short interest is well under QVI’s ceiling.

Notably, AMAT’s relative return has outperformed the market benchmark over 5 and 10 years with considerable alpha. Despite its below-average downside risks, the shareholder yields and valuation multiples warrant a neutral present-value rating.

Based on this analysis of Applied Materials’ current wealth and AMAT’s present value, Quality Value Investing's actionable view is Neutral. As such, it will not be added to the QVI Stock Picks Real-Time Performance Tracker due to its premium price level, but will remain on the QVI High-Quality Universe Watchlist for its superior business model.

The Highest Quality Companies in the Industry

AMAT is a premium-priced stock of a high-quality company that needs a temporary but significant drawdown from a micro-event or a broader stock market correction to price in as a quality-at-value opportunity. Investors with an underweight, low-cost basis might confidently add to their holdings given the stock’s market-beating history and Applied Materials’ burgeoning opportunity in the AI boom.

I analyzed its primary competitor, Lam Research (LCRX), in last week’s QVI High-Quality Universe Watchlist post, and the checklist numbers are strikingly similar.

Here’s a snapshot of their alpha return performances.

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YTD: AMAT +40.78% | LRCX +36.30% | S&P 500 -3.86%

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5-YR: LRCX +322.32% | AMAT +198.75% | S&P 500 +69.21%

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10-YR: LCRX +2,713.34% | AMAT +1,589.03% | S&P 500 +217.50%

Catalysts

Potential catalysts that could confirm or contradict QVI’s overall Neutral investment thesis on Applied Materials and its common shares include, but are not limited to:

Confirmations (bears say)

The stock price has run too high, potentially pricing in too much future growth, making it a high-quality “valuation trap.”
Slowing growth rate compared to peers, alongside intensifying competition, particularly from China.
Concerns about a cyclical downturn in GDP growth and a general pullback in the semiconductor sector, especially if AI spending moderates.
Anticipated flat performance in China for 2026 poses a risk to revenue.
Potential failure in capital allocation and restructuring, along with rising costs, could lead to declining margins.
Morningstar has a hold equivalent rating on the stock.

Contradictions (bulls say)

AMAT is a key beneficiary of AI infrastructure, as it provides critical equipment for advanced semiconductor manufacturing, including high-bandwidth memory (HBM) and next-generation chip architectures.
The company recently exceeded earnings estimates, with significant growth in free cash flow, reported at $1.04 billion.
Applied Materials’ leadership in wafer fabrication equipment (WFE) allows it to benefit from growing worldwide investments in new fab construction, particularly in the US, Japan, and Taiwan.
A large, growing service and spare parts business provides stable, recurring revenue, enhancing the company’s resilience to industry cycles.
Despite valuation concerns, some analysts remain bullish on the long-term outlook and are raising price targets significantly.
Charles Schwab has a buy equivalent, and Wall Street sell-side analysts have a consensus buy rating on the stock.

(Source of catalysts: Google's Gemini, including AOL.com, Finviz, Investing.com, Public.com, Simply Wall Street, Stocktwits, and Yahoo Finance. Edited for clarity.)

Investors should consider diverse viewpoints, while recognizing that multiple sources can lead to unreliable predictive analysis and overly complex business models. Always conduct your due diligence and review the required disclosures.

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Resources

AMAT's investor relations webpage

Applied Materials' most recent Form 10-K Annual Report to the US Securities and Exchange Commission (SEC)

10K Summary

Applied Materials, Inc. (AMAT) filed its Form 10-K for the fiscal year ended October 26, 2025, reporting its sixth consecutive year of growth despite a challenging geopolitical landscape.

Financial Highlights

Net Revenue: Reached a record $28.37 billion in net revenue, a 4% increase over fiscal 2024.
Reported record GAAP EPS of $8.66 (up 1%) and non-GAAP EPS of $9.42 (up 9%). Net income stood at $7.00 billion, slightly impacted by higher tax provisions.
Gross margin improved to 48.7%, driven by a favorable product mix and manufacturing efficiencies.
The company returned $6.3 billion to shareholders, including $4.9 billion in share repurchases and $1.4 billion in dividends.

Operational Performance

Revenue was driven by the Semiconductor Systems segment (73% of total revenue), fueled by demand for AI computing infrastructure, leading-edge logic, and DRAM. The Applied Global Services (AGS) segment contributed 23% of revenue, with a continued shift toward a recurring subscription model. Geographically, while Taiwan and Korea saw record growth, revenue from China decreased by 16% due to US export regulations.

Strategic Outlook & Risks

Applied Materials is investing heavily in its EPIC Center and next-generation technologies such as Gate-All-Around (GAA) transistors and advanced packaging. Key risks identified include ongoing trade tensions with China, industry cyclicality, and the evolving legal/ethical landscape of AI integration.

(Source of 10-K summary: Google’s Gemini. Edited for clarity.)

What are your thoughts on Applied Materials, the company, AMAT, the stock, or other opportunities in the semiconductor equipment space?

Unless noted, all data and images presented are sourced from Charles Schwab & Co., Google Finance, GuruFocus, Microsoft Designer, Applied Materials, Inc., and Yahoo Finance as of the market close on March 23, 2026, and are intended for illustration only.

Disclosure: I authored this report independently, and it reflects my personal opinions. I am not receiving compensation for it beyond Substack paid subscriptions. I have no business relationship with any company whose stock is discussed in this post.

Additional Disclosure: Quality Value Investing by David J. Waldron's primary ticker research reports are for informational purposes only. The accuracy of the data cannot be guaranteed. The narrative and analytics are not personalized and are not intended for portfolio creation beyond the QVI Stock Picks, which are presented solely for educational purposes. David is a private investor and author, not an investment adviser. Readers should conduct their own research or due diligence and, as appropriate, consult a fee-only certified financial planner, a licensed discount broker-dealer, a flat-fee registered investment adviser, a certified public accountant, or a specialized attorney before making any investment, income tax, or estate-planning decisions.