Munger's Menu
FreeQuality on sale, below the 200-week trendHigh-quality names trading below their 200-week moving average: only the ones earning above their cost of capital (ROIC > WACC) and profitable. The 200-week-MA quality idea is widely attributed to Charlie Munger but not from a verified primary source. WACC is a CAPM estimate. Not investment advice.
How it works
Charlie Munger's argument was that a fair business at a wonderful price beats a wonderful business at a fair price, and that the test of a business is whether it earns more on its capital than that capital costs. This screen runs the test, then asks what the market is charging for the result.
Two gates. The company has to earn a positive spread — return on invested capital above its weighted average cost of capital — and it has to be genuinely profitable. Then it has to be trading below its 200-week moving average. That line is long enough that one bad quarter will not put a name on this list.
When it misleads
Cost of capital is an estimate, not a fact. We build it with CAPM, and a different beta or risk-free rate moves the spread by points. Treat two points of spread as noise and twenty as signal.
Below the 200-week line is where value lives. It is also where broken companies live. The screen cannot tell you which one you are looking at, only that the price has fallen a long way from its own trend.
| # | Ticker | %MA | P/E | RevYoY | RevAcc | NetMgn | ROIC | WACC | Spread | Score |
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | FICO | −30% | 27.0 | +25.7% | +2.4pp | +34.1% | +63.6% | 9.9% | +53.7pp | 76.4 |
| 2 | ADBE | −36% | 15.2 | +12.7% | −0.3pp | +28.7% | +57.2% | 10.9% | +46.3pp | 76.2 |
| 3 | DUOL | −27% | 18.3 | +18.3% | −2.1pp | +35.9% | +33.5% | 8.7% | +24.8pp | 66.4 |
| 4 | MKC | −28% | 8.7 | +16.7% | +0.8pp | +21.9% | +8.9% | 6.6% | +2.3pp | 64.0 |
| 5 | DECK | −25% | 12.2 | +5.7% | −6.5pp | +18.4% | +106.0% | 9.8% | +96.3pp | 62.1 |
| 6 | ADSK | −12% | 28.3 | +16.1% | +6.0pp | +21.1% | +35.6% | 10.4% | +25.2pp | 58.3 |
| 7 | INTU | −39% | 20.2 | +13.7% | +2.3pp | +21.3% | +17.3% | 8.8% | +8.6pp | 55.9 |
| 8 | PODD | −39% | 27.6 | +23.5% | +8.7pp | +12.3% | +16.6% | 9.3% | +7.3pp | 55.4 |
| 9 | ACN | −35% | 14.9 | +5.6% | +6.1pp | +10.7% | +29.6% | 9.3% | +20.4pp | 54.7 |
| 10 | OTIS | −20% | 18.3 | +7.3% | +0.8pp | +10.2% | +82.5% | 7.5% | +75.0pp | 53.8 |
| 11 | GDDY | −16% | 15.1 | +6.6% | +0.8pp | +17.8% | +33.5% | 7.7% | +25.8pp | 53.4 |
| 12 | BRO | −13% | 22.8 | +32.4% | +10.4pp | +18.1% | +6.7% | 6.2% | +0.6pp | 52.7 |
| 13 | NVO | −43% | 11.4 | +2.1% | −18.6pp | +35.3% | +35.4% | 4.7% | +30.8pp | 52.1 |
| 14 | PAYX | −1% | 24.9 | +12.5% | +11.3pp | +26.6% | +27.1% | 8.8% | +18.3pp | 50.2 |
| 15 | ZTS | −51% | 12.4 | −0.2% | −6.1pp | +27.7% | +27.8% | 6.6% | +21.2pp | 49.1 |
| 16 | DPZ | −16% | 19.3 | +4.3% | −0.1pp | +11.9% | +73.9% | 7.2% | +66.7pp | 48.5 |
| 17 | IT | −47% | 16.7 | −0.6% | −2.4pp | +12.0% | +42.3% | 7.7% | +34.7pp | 48.0 |
| 18 | ISRG | −12% | 42.0 | +18.5% | +3.3pp | +28.4% | +17.7% | 11.6% | +6.1pp | 46.5 |
| 19 | BULL | −8% | 16.0 | +53.3% | +46.2pp | +6.3% | +7.5% | 7.2% | +0.3pp | 46.4 |
| 20 | VRSK | −21% | 28.6 | +4.4% | −0.8pp | +28.2% | +34.3% | 6.8% | +27.6pp | 45.7 |
| 21 | BSX | −34% | 19.4 | +7.5% | +2.3pp | +17.5% | +9.5% | 6.5% | +3.0pp | 44.7 |
| 22 | FDS | −22% | 19.9 | +6.4% | −0.2pp | +23.2% | +18.9% | 7.2% | +11.7pp | 44.5 |
| 23 | DXCM | −5% | 34.7 | +13.1% | +4.3pp | +20.1% | +26.4% | 11.0% | +15.4pp | 44.3 |
| 24 | LULU | −66% | 8.3 | −4.3% | −5.2pp | +12.8% | +31.5% | 7.9% | +23.6pp | 44.1 |
| 25 | PYPL | −16% | 10.4 | +4.8% | −2.5pp | +14.4% | +25.2% | 9.5% | +15.7pp | 43.8 |
| 26 | BF-B | −40% | 17.2 | −1.4% | +3.7pp | +18.4% | +12.8% | 5.5% | +7.3pp | 42.8 |
| 27 | VICI | −17% | 9.9 | +5.7% | −2.5pp | +67.5% | +8.2% | 6.6% | +1.6pp | 42.7 |
| 28 | EIX | −16% | 5.9 | −4.1% | +2.0pp | +19.3% | +10.0% | 4.4% | +5.6pp | 42.7 |
| 29 | AMCR | −6% | 19.0 | +25.9% | +46.6pp | +4.7% | +6.6% | 5.9% | +0.7pp | 41.3 |
| 30 | CPRT | −25% | 20.9 | +2.1% | +0.2pp | +33.5% | +21.3% | 9.4% | +11.9pp | 41.2 |
| 31 | BR | −11% | 18.0 | +7.5% | +2.7pp | +15.0% | +20.3% | 7.9% | +12.5pp | 40.2 |
| 32 | LOW | −11% | 17.3 | +8.3% | +6.3pp | +7.3% | +23.1% | 6.9% | +16.3pp | 40.0 |
| 33 | SBAC | −14% | 20.5 | +2.3% | +6.2pp | +34.5% | +14.3% | 6.4% | +7.9pp | 39.9 |
| 34 | PTC | −13% | 13.7 | −6.8% | +9.6pp | +41.4% | +15.9% | 8.9% | +7.0pp | 39.5 |
| 35 | CHTR | −51% | 4.0 | −1.7% | −1.4pp | +9.1% | +8.6% | 4.7% | +3.9pp | 39.3 |
| 36 | ROL | −25% | 32.6 | +7.9% | +0.7pp | +13.6% | +23.7% | 7.6% | +16.1pp | 39.1 |
| 37 | MCD | −12% | 20.8 | +3.7% | +2.1pp | +31.7% | +18.8% | 5.4% | +13.4pp | 38.7 |
| 38 | CDW | −17% | 18.3 | +10.0% | +8.6pp | +4.6% | +15.9% | 7.6% | +8.3pp | 38.1 |
| 39 | NKE | −54% | 18.3 | −1.1% | +10.0pp | +6.7% | +16.5% | 8.9% | +7.6pp | 36.9 |
| 40 | POOL | −42% | 17.0 | +2.2% | +3.8pp | +7.4% | +16.9% | 8.2% | +8.7pp | 36.6 |
| 41 | CTSH | −10% | 13.4 | +4.5% | +5.0pp | +10.3% | +16.0% | 8.2% | +7.8pp | 36.1 |
| 42 | AOS | −15% | 16.8 | −0.7% | +1.2pp | +13.1% | +29.7% | 10.0% | +19.7pp | 36.1 |
| 43 | PEP | −15% | 18.1 | +6.4% | +1.8pp | +10.8% | +15.0% | 5.2% | +9.8pp | 34.2 |
| 44 | LVS | −12% | 17.2 | −0.7% | +6.3pp | +12.6% | +18.4% | 6.8% | +11.6pp | 34.0 |
| 45 | UHS | −2% | 6.9 | +8.3% | −1.1pp | +8.4% | +13.2% | 7.1% | +6.1pp | 33.1 |
| 46 | PG | −6% | 22.1 | +1.5% | +3.0pp | +18.4% | +21.3% | 5.8% | +15.5pp | 33.0 |
| 47 | CMCSA | −23% | 8.5 | −1.2% | −1.8pp | +9.0% | +12.4% | 5.5% | +6.9pp | 33.0 |
| 48 | TTD | −78% | 17.2 | +3.0% | −7.2pp | +13.6% | +17.5% | 9.0% | +8.6pp | 32.4 |
| 49 | PCG | −16% | 10.3 | +0.1% | +2.1pp | +11.8% | +5.9% | 5.1% | +0.7pp | 32.0 |
| 50 | TSCO | −28% | 18.2 | +2.3% | +2.1pp | +6.4% | +13.8% | 5.2% | +8.6pp | 31.5 |
| 51 | JKHY | −0% | 23.8 | +4.7% | −0.1pp | +19.8% | +24.4% | 7.1% | +17.2pp | 31.0 |
| 52 | LII | −17% | 17.4 | +3.0% | −9.9pp | +14.9% | +29.1% | 9.3% | +19.8pp | 31.0 |
| 53 | STZ | −38% | 12.2 | −3.3% | −13.0pp | +20.1% | +10.6% | 5.0% | +5.6pp | 30.8 |
| 54 | PPG | −9% | 16.1 | +7.2% | +2.6pp | +9.6% | +13.0% | 7.9% | +5.1pp | 30.7 |
| 55 | AMT | −11% | 24.2 | +4.7% | +4.0pp | +31.1% | +8.1% | 6.6% | +1.5pp | 30.6 |
| 56 | HSY | −12% | 23.7 | +6.6% | +4.0pp | +12.2% | +11.1% | 4.5% | +6.6pp | 29.4 |
| 57 | PNR | −26% | 15.5 | −17.0% | +2.8pp | +16.2% | +12.8% | 8.5% | +4.4pp | 29.0 |
| 58 | TMUS | −3% | 19.0 | +7.9% | +4.9pp | +11.5% | +7.9% | 4.6% | +3.3pp | 29.0 |
| 59 | NOW | −1% | 88.3 | +24.0% | −1.6pp | +11.3% | +15.2% | 9.0% | +6.1pp | 28.9 |
| 60 | KMB | −16% | 20.7 | +0.6% | −0.1pp | +11.8% | +20.2% | 5.1% | +15.0pp | 28.8 |
| 61 | MRSH | −5% | 22.7 | +6.2% | +2.7pp | +14.2% | +14.7% | 6.5% | +8.2pp | 28.1 |
| 62 | UPS | −23% | 19.0 | +7.6% | −2.8pp | +5.1% | +16.3% | 7.8% | +8.5pp | 27.6 |
| 63 | TYL | −19% | 47.8 | +8.2% | −0.4pp | +13.4% | +9.6% | 8.2% | +1.4pp | 26.5 |
| 64 | WEN | −48% | 12.2 | +1.7% | −6.1pp | +5.7% | +6.5% | 3.3% | +3.2pp | 26.1 |
| 65 | SYK | −8% | 31.4 | +9.4% | +0.9pp | +14.4% | +10.7% | 7.5% | +3.3pp | 25.9 |
| 66 | ABT | −4% | 35.1 | +13.0% | +1.1pp | +11.6% | +12.0% | 6.9% | +5.1pp | 25.7 |
| 67 | LDOS | −2% | 12.4 | +7.2% | −4.9pp | +7.8% | +17.9% | 6.2% | +11.7pp | 25.6 |
| 68 | CCI | −27% | 31.0 | −4.9% | +1.4pp | +20.7% | +7.3% | 6.3% | +1.0pp | 25.4 |
| 69 | TXT | −2% | 14.9 | +3.0% | +7.9pp | +6.1% | +10.5% | 7.4% | +3.1pp | 25.1 |
| 70 | AON | −4% | 17.8 | +2.2% | −7.9pp | +22.3% | +18.1% | 6.9% | +11.2pp | 25.0 |
| 71 | AVY | −6% | 19.2 | +10.9% | −3.5pp | +7.6% | +13.7% | 7.1% | +6.5pp | 22.8 |
| 72 | ALGN | −30% | 27.5 | +4.3% | −2.6pp | +10.0% | +13.4% | 12.4% | +0.9pp | 22.2 |
| 73 | HD | −8% | 22.5 | +5.7% | −1.2pp | +8.4% | +20.8% | 8.0% | +12.8pp | 22.2 |
| 74 | CMG | −17% | 34.2 | +9.3% | −9.2pp | +11.4% | +20.4% | 8.5% | +11.9pp | 22.0 |
| 75 | PEG | −0% | 18.3 | −8.9% | +26.7pp | +16.0% | +7.2% | 5.6% | +1.7pp | 21.9 |
| 76 | CLX | −32% | 19.3 | −2.0% | −5.6pp | +8.7% | +12.8% | 5.3% | +7.5pp | 21.3 |
| 77 | NVR | −10% | 16.4 | −10.9% | −12.5pp | +11.8% | +45.4% | 8.5% | +36.9pp | 20.8 |
| 78 | CPB | −46% | 16.3 | −7.9% | +3.4pp | +4.1% | +7.9% | 4.0% | +3.9pp | 20.6 |
| 79 | UDR | −8% | 23.0 | −0.1% | −0.3pp | +29.6% | +6.5% | 6.3% | +0.1pp | 20.5 |
| 80 | ELV | −5% | 18.0 | +1.4% | +9.4pp | +2.5% | +10.3% | 6.7% | +3.6pp | 20.0 |
| 81 | JD | −17% | 18.8 | −2.9% | +6.1pp | +1.1% | +13.2% | 3.3% | +9.9pp | 19.8 |
| 82 | MDLZ | −7% | 22.4 | +4.1% | +4.6pp | +8.9% | +5.9% | 5.4% | +0.5pp | 19.0 |
| 83 | DG | −0% | 17.3 | +5.2% | +0.2pp | +3.9% | +7.3% | 4.0% | +3.4pp | 14.3 |
| 84 | HRL | −32% | 34.7 | −2.9% | +3.1pp | +2.8% | +5.3% | 5.1% | +0.2pp | 13.1 |
| 85 | CI | −6% | 11.7 | +6.7% | −15.6pp | +2.3% | +11.3% | 5.2% | +6.1pp | 12.1 |
| 86 | UNH | −12% | 25.5 | +0.4% | +4.1pp | +3.1% | +11.0% | 6.9% | +4.1pp | 11.3 |
| 87 | WYNN | −7% | 22.0 | +6.9% | −9.0pp | +6.1% | +8.7% | 6.3% | +2.3pp | 7.1 |
| 88 | PFE | −5% | 37.4 | +2.6% | −8.5pp | +6.8% | +6.8% | 5.3% | +1.5pp | -0.6 |