Recap from August Picks

Our Most Attractive Stocks (-6.4%) fell less than the S&P 500 (-8.9%) last month and outperformed as a long portfolio. Most Attractive Large Cap stock NVIDIA Corporation (NVDA) gained 5% and Most Attractive Small Cap stock MBIA Inc. (MBI) was up 17%. Overall, 26 out of the 40 Most Attractive stocks outperformed the S&P 500 in August.

Our Most Dangerous Stocks (-9.5%) fell by more than the S&P 500 (-8.9%) last month and outperformed as a short portfolio. Most Dangerous Large Cap stock, Charles Schwab Corp. (SCHW), fell by 18% and Most Dangerous Small Cap Stock, El Pollo Loco Holdings, Inc. (LOCO), fell by 35%. Overall, 18 out of the 40 Most Dangerous stocks outperformed the S&P 500 in August.

The successes of the Most Attractive and Most Dangerous stocks highlight the value of our forensic accounting. Being a true value investor is an increasingly difficult, if not impossible, task considering the amount of data contained in the ever-longer annual reports. By analyzing key details in these SEC filings, our research protects investors’ portfolios and allows our clients to execute value-investing strategies with more confidence and integrity.

22 new stocks make our Most Attractive list this month and 28 new stocks fall onto the Most Dangerous list this month. September’s Most Attractive and Most Dangerous stocks were made available to members on September 2.

Our Most Attractive stocks have high and rising return on invested capital (ROIC) and low price to economic book value ratios. Most Dangerous stocks have misleading earnings and long growth appreciation periods implied by their market valuations.

Most Attractive Stock Feature for September: HCA Holdings (HCA: $85/share)

HCA Holdings (HCA), which operates hospitals and surgery centers across the nation, is one of the additions to our Most Attractive stocks list for September.

HCA Holdings has used its market leading position, believed to be the largest hospital operator in the world, to build a highly profitable business. Since 2012, HCA has grown revenue and after-tax profit (NOPAT) by 5% compounded annually.