Have you ever heard about cannibal stocks? These kind of stocks are heavily buying back their own shares. Cannibal stocks can be very interesting as your ownership in the company increases every single year without doing anything. In this article you find 15 Cannibal Stocks you should know.
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As a business professional, now beloved educator, activist, advocate, veteran, mentor, content creator, entrepreneur son, nephew, brother, funcle dedicated and committed to enriching the financial lives of my underserved community.
Growing up poor, marrying into money, gifted knowledge, experience and education. Loosing it all but the knowledge, experience and education. Finding peace, understanding and my heart. Possessing a sincere respect and love for others, while avoiding the conflict to deliver competence.
I as well took and oath to protect and serve this nation from all enemies foreign and domestic.
Unlike grifters, opportunist and takers. I have be created for this very moment in history.
Thanks for letting me know! It seems like something went wrong with the data.
As a way to say thank you, I want to share my latest investment case with you (30-page deep dive) which won't be shared publicly. If you send me an email, I'll share it with you!
Love these lists, always brimming with great companies to dig into.
Recently wrote up #8 on the list (WINA). Besides being a share cannibal it has awesome management, a quality business, and not many investors seem to know about it.
Not in order of investment potential. I am currently not allowed to give individual stock tips/advice due to my job but I'll soon give readers an insight in my portfolio!
Interesting article. You are providing a lot of useful information. Not sure if UK and European companies are doing buybacks to the same extent. Does anyone else know? It has been suggested that the European market is undervalued.
Hello! Amazing content, thank you for sharing. I am wondering what stock screener you use? The one I have been using does not have a lot of these metrics. Thanks!
Let's say a company has 1 million shares outstanding and earns $10 million ($10 per share). When the company buys back 80% of its own shares, outstanding shares decrease to 200k. When the company still earns $10 million, Earnings Per Share are equal to $50.
EPS increased 5X and so should the stock price.
It's a bit the same as compounding. The more you do it, the better the magic works.
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As we build upon this connect for which I’m truly grateful. I may take you up on your offer to help.
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Growing up poor, marrying into money, gifted knowledge, experience and education. Loosing it all but the knowledge, experience and education. Finding peace, understanding and my heart. Possessing a sincere respect and love for others, while avoiding the conflict to deliver competence.
I as well took and oath to protect and serve this nation from all enemies foreign and domestic.
Unlike grifters, opportunist and takers. I have be created for this very moment in history.
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Great information as always. I appreciate your service very much. Thank you for that! 😀
Thank you, Georg!
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An Informative, entertaining and extremely beneficial piece!
As always, I saved it for last, and it made my day...again.
There is only one Compounding Quality, and he is outstanding!
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You make me blush with every single day, Pavel!
Have a wonderful day. You are one of the reasons why I write these articles!
First of all thank you so much for your interesting articles which I enjoy reading!
In the text "12. PulteGroup ($PHM)" you mention a free cash flow margin of 16,1%.
In the overview graphic a FCF Margin of 3,42% is mentioned for Pulte.
The correct percentage is 3,42% according to Morningstar.
Hi Arthur,
Thanks for letting me know! It seems like something went wrong with the data.
As a way to say thank you, I want to share my latest investment case with you (30-page deep dive) which won't be shared publicly. If you send me an email, I'll share it with you!
compoundingquality@gmail.com
Thank you too.
I have sent you an e-mail.
Hello
I am new to this, unfortunatelly I haven't much time to do my own research.
This information from you is quite valuable and I think I will be able to get some profit out of it.
I send you a big thanks and hug from Spain.
It's an honor to have you!
Do not hesitate to reach out if you have any questions.
Your very fine articl began:
“ We used the following criteria to screen for High Quality Cannibal Stocks:
ROIC > 15%
Profit margin > 10%
EPS growth past 5 years > 10%
Decrease in shares outstanding past 10 years > 30% “
However, your description of the elements was different…containing five elements.
Please comment.
Hi Daniel,
We screened for Quality Cannibal stocks as follows:
- ROIC > 15%
- Profit margin > 10%
- EPS growth past 5 years > 10% per year
- Decrease in shares outstanding past 10 years > 30%
After that, we made a list with 15 companies which matched the criteria above.
In the list, we used 5 (other) criteria to give you an indication about the valuation, profitability and capital allocation skills of the company.
In the overview chart near the end, "Expected yearly FCF Growth ..." column values are copies of the preceding column's "FCF Yield" values.
Hi Brec,
Thank you for noticing! I made the adaptions needed.
As a way to say thank you, I will share my latest investment case with you (which I won't share publicly). Send me an email and I'll send it to you!
compoundingquality@gmail.com
Thanks! Email sent...
Meanwhile, on this subject: what's the source of the expected FCF growth, and in your experience how much weight should be given to it?
Love these lists, always brimming with great companies to dig into.
Recently wrote up #8 on the list (WINA). Besides being a share cannibal it has awesome management, a quality business, and not many investors seem to know about it.
Thanks. I will look into your article this weekend!
Being my first post would love to get your feedback if you get the chance to read it!
Great article, are the stocks in order of investment potential or just random.
Not in order of investment potential. I am currently not allowed to give individual stock tips/advice due to my job but I'll soon give readers an insight in my portfolio!
Great looking forward to that.
Very nice article! WINA looks very interesting. I think the FC yield is around 3%. At 10% it would be a no-brainer.
Thanks for noticing! Something went wrong with the data for this article. I adjusted it to the correct FCF Yield 3.9%.
Please send me an email and I'll send you a gift as a way to say thank you.
compoundingquality@gmail.com
Interesting article. You are providing a lot of useful information. Not sure if UK and European companies are doing buybacks to the same extent. Does anyone else know? It has been suggested that the European market is undervalued.
European stocks are doing it too for sure!
Great, thank you so much! :-)
If I may ask, given the hypothetical scenario that tomorrow you had to put one of those 15 names into your portfolio, which one would you choose?
Hi Simon,
I would like to keep that for myself right now. I am not allowed to talk about individual stocks at this point in time due to my job.
What I can tell you is that I really like 3 stocks in this list. :)
Ok, fair enough.
I'll make my best guess :-)
Hello! Amazing content, thank you for sharing. I am wondering what stock screener you use? The one I have been using does not have a lot of these metrics. Thanks!
I use Bloomberg, which is really expensive (around $50,000 per year).
I find your articles clearly and concisely written. Thank you for your hard work
It's very people like you and reactions like this that I write these articles. Have a lovely day, Patrick!
Hi Mumim,
Let's say a company has 1 million shares outstanding and earns $10 million ($10 per share). When the company buys back 80% of its own shares, outstanding shares decrease to 200k. When the company still earns $10 million, Earnings Per Share are equal to $50.
EPS increased 5X and so should the stock price.
It's a bit the same as compounding. The more you do it, the better the magic works.