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r/valueinvesting
Quality Compounders on sale: Thoughts on this watchlist?
Investor summaryBullish
Author looks to buy high-quality compounders like UBER experiencing valuation compression amid the semiconductor-driven rally.
Bull points
- High-quality compounders with deep moats are currently experiencing valuation compression, offering attractive entry points.
- The current pullback presents a potential buying opportunity for long-term investors avoiding overhyped Big Tech.
Bear points
- The market is currently driven almost entirely by the semiconductor rally, which might lead to prolonged underperformance for non-semi compounders.
- It is uncertain whether the current pullback is a temporary correction or a fundamental shift in business economics.
Post body
Hi guys , current market environment is absolutely crazy, with indices being driven almost entirely by the semiconductor rally. As a result, many high quality compounders are currently suffering from valuation compression.
I want to avoid the typical "Big Tech" (MSFT, META, AMZN or SaaS stocks )discussion and focus on pure compounders that I’m currently tracking: $SPGI, $UBER, $FICO, $ROL, $KNSL, $GWRE, $VEEV, $ROP, $POOL, $TSCO, $ZTS, $ROP, BRO.
These businesses often trade at a premium due to their deep moats and exceptional economics, but the current pullback is catching my interest.
Some questions for you:
- Are any of these currently in your "buy zone" after the recent compression?
- Which do you see as a temporary correction versus a fundamental shift?
- Given their typical premium pricing, which of these currently offers the most "incredible" risk-reward profile?
- Are there any other high-quality compounders with similar characteristics that I’m missing and should be tracking?
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