Rover's Weekly Market Brief — 4/17/2020

Indices

DJIA: 24,242.50 (+2.21%)

NASDAQ: 8,650.00 (+6.09%)

S&P 500: 2,874.56 (+3.04%)

Commodities

Gold: 1,694.20 (-3.34%)

Copper: 234.60 (+3.83%)

Crude Oil: 25.12 (+10.37%)

New Buffettology Screener in the Stock Rover Investor’s Library

Vintage Value Investing, which is one of Stock Rover’s affiliate partners had added an interesting new screener to our investor’s library. It is called the Vintage Value Investing’s Wealth Builder screener and is available to our subscribers (Premium Plus level) in the Investor’s Library.

There is also a corresponding Table View in the Investor’s Library with the same name that contains the criteria used for the screeners as columns in the table.

For those that are interested in what the screener does, the following paragraph describes the screener’s methodology.

The VVI Wealth Builder screener is based on Warren Buffett’s investing criteria depicted in the bestselling book: Buffettology. The company should have a 10-year past performance of generally increasing EPS with zero negative earnings years; long-term debt no more than 5 times annual earnings; average ROE over the past 10 years at least 15%; average ROIC over the last 10 years at least 12%; a margin of safety of at least 20% from fair value; and earnings yield higher than the long term Treasury yield. Additional screens for business health have been added to include favorable Altman Z, Piotroski F, Beneish M scores. Lastly, to ensure solid growth potential, businesses must have an EPS 10-year average annual growth of 10%, and a sustainable growth rate of at least 10%.

Economy

Overall retail sales in March were down -8.7% from February and -6.2% from a year earlier, although total sales for the three month period of January through March 2020 were up +1.1% from the same period a year earlier. COVID-19 related closures caused steep sales drops in clothing stores (-50.5%), furniture stores (-26.8%), restaurants (-26.5%), and auto dealers (-25.6%). Gasoline station sales fell -17.2% as a result of both drop in demand and falling oil prices. However, sales increased for food and beverage stores (+25.6%), general merchandise stores (+6.4%), nonstore (i.e. internet) retailers (+3.1%), and building supply stores (+1.3%).

The COVID-19 pandemic led many factories to suspend operations in late March, and industrial production fell -7.9%, with manufacturing falling -6.3%, for the largest declines since 1946. Durable goods manufacturing fell -9.1% with declines led by motor vehicles (-28.0%), furniture (-10.0%), and aerospace/miscellaneous transportation equipment (-8.1%). Nondurable manufacturing fell -3.2% with the steepest declines in printing (-18.2%), apparel (-16.5%), and textile and product mills (-14.1%). All manufacturing groups declined for the year with the exceptions of computers (+4.9%), wood products (+0.9%), food products (+0.5%), and paper (+0.1%).

The Federal Reserve’s Beige Book summary of economic conditions outlined a sharp and abrupt contraction of activity over all 12 Federal Reserve Districts. Leisure/hospitality and retail were the hardest hit, with the exception of retail for essential goods. Food and medical products were the only two manufacturing sectors uniformly reporting strong demand, and they faced production delays and supply chain disruptions. Employment declines were widespread, with several contacts noting they were laying off or furloughing workers, and hoped to bring workers back once activity resumed. Some districts reported high demand for loans, both from businesses accessing lines of credit and households refinancing mortgages. Business contacts reported a highly uncertain outlook and most expected conditions to worsen over the next several months.

Upcoming Economic Reports:

Tuesday April 21 – Existing Home Sales

Friday April 24 – Durable Goods Orders

Earnings Calendar:

 

Monday Tuesday Wednesday Thursday Friday
IBM
(IBM)
Coca-Cola
(KO)
AT&T
(T)
Intel
(INTC)
Verizon
Communications
(VZ)
Truist
Financial
(TFC)
Netflix
(NFLX)
Thermo Fisher
Scientific
(TMO)
Eli Lilly
(LLY)
3M
(MMM)



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