SHW – THE SHERWIN-WILLIAMS COMPANY (HQ: USA/Industry: Chemicals)
The Sherwin-Williams Company and its consolidated subsidiaries are engaged in the development, manufacture, distribution and sale of paint, coatings and related products to professional, industrial, commercial and retail customers primarily in North and South America with additional operations in the Caribbean region, Europe, Asia and Australia.

Sherwin-Williams has had steady consistent growth over the last 10-years with sales increasing almost 110%, BV increasing almost 90% and EPS up more than 320%. Not surprising, the stock is up more than 500% during this time, though there has been a sharp sell-off since the start of 2022. To value the business at their current market price the company would need more than 16% per year growth for the next 10-years.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=89800&owner=exclude

FMCC – FEDERAL HOME LOAN MORTGAGE CORP (HQ: USA/Industry: Thrifts & Mortgage Finance)
Freddie Mac’s mission is to provide liquidity, stability, and affordability to the U.S. housing market. The company does this primarily by purchasing single-family and multifamily residential mortgage loans originated by lenders. In most instances, these loans are packaged into guaranteed mortgage-related securities, which are sold in the global capital markets, and transfer interest-rate and liquidity risks to third-party investors.

Although Freddie Mac’s stock price is well below the margin of safety intrinsic value, keep in mind that Freddie Mac is in receivership with the US Treasury, and dividend payments are only made to the Treasury. Until this receivership is removed or loosened, Freddie Mac’s stock will remain substantially low. There is no current expectation on when receivership adjustments will be made.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=1026214&owner=exclude

ARCB – ARCBEST CORPORATION (HQ: USA/Industry: Road & Rail)
ArcBest is a multibillion-dollar logistics company that leverages technology and a full suite of shipping and logistics solutions to meet customer needs and help keep the global supply chain moving. Through organic growth, smart strategic acquisitions, visionary leadership, and a mindset focused on the future, ArcBest has evolved from a local Arkansas freight hauler to a logistics powerhouse.

ArcBest has had steady consistent growth in the BV by increasing 115% over the last 10-years, with the stock up almost 400% during the period. Though the stock trades at a fair valuation, however, this valuation does not take into account any margin of safety. If the price continues to decline as it has since January 2022, potentially it could see a price that provides a sufficient safety factor.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=894405&owner=exclude

CIO – CITY OFFICE REIT, INC. (HQ: Canada/Industry: Equity Real Estate Investment Trusts (REITs))
City Office REIT is an internally managed corporation focused on owning, operating and acquiring high-quality office properties located in the Southern and Western United States. Focusing on markets that possess a number of attractive demographic and employment characteristics that the company believes will lead to capital appreciation and growth in rental income at our properties.

Since the March 2020 COVID drop, City Office has recovered and slightly outperform the S&P500, though the stock has seen a slightly larger dip in 2022 than the index has. To value the business at their current market price the company would need a 10% per year growth for the next 10-years.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=1593222&owner=exclude

ADS – ALLIANCE DATA SYSTEMS CORPORATION (HQ: USA/Industry: IT Services)
Alliance Data Systems is a leading provider of tech-forward payment and lending solutions, serving customers and consumer-based industries in North America. Through omni-channel touch points and a comprehensive product suite that includes credit card products and digital payment solutions, the company helps businesses drive revenue growth and customer loyalty, while giving customers greater payment choices.

Since 2018, Alliance Data Systems stock has sold-off and has not seen a bounce back, this could be due to yearly revenue declines over this period. Although the company has seen revenue declines, it’s free cash flow has not had as much of an impact, but they are down as well during the period. With the company still providing good cash flows, having a high ROE, and 2021 being the best years for EPS and BV since 2018, possibly the market is severely undervaluing the company.

SEC filing link: https://www.sec.gov/edgar/browse/?CIK=1101215&owner=exclude