Category: John’s Weekly Column
My Bunny Portfolio Has Averaged a 13.7% Return
Posted: December 09, 2025
December 8, 2025 (Maple Hill Syndicate) – Happy 25th birthday, Bunny.
Today’s column is the 25th I’ve written about a collection of stocks named after the Energizer Bunny of commercial fame. That bunny is “still going” long after you would have expected it to fail.
My Bunny stocks are supposed to do the same thing. They are stocks with a glorious past but an uncertain future. More specifically, they have grown earnings at a 25% annual clip in the past five years but investors are gloomy about them, valuing them at 12 times earnings or less.
The theory behind this portfolio is that human beings are terrible at predicting the future. Therefore, when negative sentiment hits companies that have done well in the past, it may pay to stick with those companies.
The first 24 Bunny Portfolios have posted an average 12-month return of 13.7%. That beats the average for the Standard & Poor’s 500 Total Return Index, which came in at 11.0%.
Bear in mind that my column results are hypothetical and shouldn’t be confused with results I obtain for clients. Also, past performance doesn’t predict the future.
Members of this hypothetical portfolio are chosen by formula, not by judgment. Among stocks that meet the basic qualifications, the five fastest growers and the five cheapest stocks are combined into a ten-stock portfolio.
Here is the lineup for the 25th Bunny Portfolio.
Amphastar
Amphastar Pharmaceuticals Inc. (AMPH) specializes in “technically complex” injectable drugs and nasal sprays. Its earnings have grown rapidly over the past five years, but took a tumble in the past year. The stock has lost 26% of its value in 2025 to date.
Cal-Maine Foods
The largest U.S. egg producer is Cal-Maine Foods Inc. (CALM), out of Ridgeland, Mississippi. It has benefitted from a sharp rise in the price of eggs. But earnings are volatile because of fluctuations in the incidence of avian flu and the price of corn (chicken feed).
Civitas
Civitas Resources Inc. (CIVI) explores for and produces oil and gas in Colorado. It had less than $1 billion in revenue as recently as 2021; that jumped to more than $5 billion in 2024. However, debt has also climbed. Civitas pays more than 8% interest on a lot of the debt, and more than 9% on some of it.
GigaCloud
GigaCloud Technology Inc. (GTC) operates an e-commerce platform for big and bulky goods such as appliances, fitness equipment and furniture. It facilitates transactions between sellers and buyers, and takes a slice of the transaction amount. The stock, public since 2022, trades at 12 times earnings.
Harley-Davidson
Harley-Davidson Inc. (HOG) is part of American folklore, but the stock has lost nearly half its value in the past three years. The motorcycle maker has labored at times under a heavy debt load. The debt is still higher than I prefer, but the debt-to-equity ratio today is the lowest in ten years.
Rayonier
Structured as a real estate investment trust, Rayonier Inc. (RYN) owns some two million acres of timberland. The stock has done poorly over almost any period you want to name. Analysts paradoxically don’t like it (four “holds” and only one “buy” rating) yet project its price will risen 37% in the next year.
Stride
Stride Inc. (LRN)is an online education company, used mostly by people who are doing home schooling. The stock has plunged this year after a county board of education in Illinois accused the company of wrongdoing, including overstating the number of enrolled students it has.
Three Banks
Three banks made the Bunny list. First Citizens BancShares Inc. (FCNCA) has averaged 38% annual growth in profits for the past five year, but profits fell 12% in the past four quarters. Analysts mostly take a favorable view, with 9 out of 14 analysts calling the stock a “buy.”
Third Coast Bancshares Inc. (TCBX) has 11 branches in Texas, mostly in Houston, Dallas-Fort Worth and Austin. It went public in 2021 and has earned better than 1.00% on assets – my favorite yardstick for banks – in 2024 and this year.
NorthEast Community Bancorp Inc. (NECB) is based in White Plains, New York, and operates throughout the Northeastern U.S. The stock trades for less than seven times earnings and is almost completely ignored by Wall Street.
Recent Flop
While the Bunny Portfolio has, on average, been successful, it did miserably last year, dropping 15.5%. That was its second-worst performance ever. Only the 2006-2007 period was worse, with a 23.9% loss.
The Bunny’s best outings were in 2002-2003 (up 76.6%) and 2012-2013 (up 47.9%).
Disclosure: I own Cal-Maine Foods personally and for most of my clients. Figures and ratios in this column are as of December 5, 2025.
John Dorfman is chairman of Dorfman Value Investments in Boston. His firm of clients may own or trade securities discussed in this column. He can be reached at jdorfman@dorfmanvalue.com.
Insiders Buy at Carrier, Hershey and T-Mobile
Posted: December 02, 2025
December 1, 2025 (Maple Hill Syndicate) – A few corporate chieftains bought their own company’s stock in November.
Numerous studies, most notably at the University of Michigan, have shown that insiders do better, on average, than regular investors. Trades by chief executive officers (CEOs) generally do better than those of other insiders.
Let’s glance at a quintet of insider purchases from last month that piqued my interest.
Carrier
You may have owned a Carrier air conditioner at some point. Carrier Global Corp. (CARR) is a giant in the heating, ventilation and air conditioning (HVAC) business.
Until 2020, Carrier was a subsidiary of the conglomerate now known as RTX Corp. (RTX). It has notched strong and consistent profits, yet its stock has underperformed the Standard & Poor’s 500.
My guess is that better times lie ahead. Perhaps CEO David Gitlin thinks so too. On November 25 he bought just over $1 million of Carrier stock and now holds about $45 million of it. This purchase was his first in five years.
Hershey
Kirk Tanner, former CEO of both PepsiCo Inc. (PEP) and Wendy’s Co. (WEN), will soon occupy the CEO seat at Hershey Co. (HSY). He bought some Hershey shares in November and now owns about $9 million worth, plus about $14 million in PepsiCo shares.
Hershey’s shares are well off their high, reached in 2023. But I personally wouldn’t buy them yet. The stock sells for 28 times earnings, a bit rich considering that the company is fighting high cocoa prices.
Roper Technologies
Based in Sarasota, Florida, Roper Technologies Inc. (ROP) is a conglomerate of some 30 businesses, most of which have to do with technology in general and software in particular.
“Each portfolio company operates independently from the others,” Roper says. Free cash flow goes to the parent company, and “is then utilized to acquire additional businesses.” Among Roper’s units are Vertafore (software for the insurance industry) and Frontline Education (educational administration).
Laurence Neil Hunn, Roper’s CEO, has generally been a seller of Roper shares over the years. However, he spent more than $4 million to buy some shares on November 12 and now owns some $85 million worth.
T-Mobile US
T-Mobile US Inc. (TMUS) has been gaining market share from AT&T (T) and Verizon (VZ). In the past five years it has increased earnings at a rapid clip, 27%. Last month it named a new CEO, Srini Gopalan.
Gopalan celebrated by spending almost $2 million on T-Mobile US shares. That brings his total holding to about $32 million as of late November.
I’m not keen on T-Mobile stock. T-Mobile US’s debt is almost twice as large as stockholders’ equity. And revenue for the past five years has grown at a 5.1% clip – respectable but not spectacular.
Central Bancompany
Central Bancompany Inc. (CBC), is a mid-sized bank whose stock just started trading publicly a few days ago, on November 20. Based in Jefferson City, Missouri, it has 159 branches in seven states — Missouri, Colorado, Illinois, Iowa Kansas, North Carolina and Oklahoma.
The first thing I look for in a bank stock is a return on assets of 1.00% or more. Central Bancompany has beaten that standard every year since 2019, often by a considerable margin. In the past four quarters it earned 1.60% on assets.
John Thomas Ross, the bank’s president and CEO, bought some shares last month in the public offering and now owns some $12.2 million worth. Sixteen other insiders also purchased shares.
Performance
This is the 76th column I’ve written about insider buys and sells. I can calculate the returns for 66 of those columns – all of those written from the beginning of 1999 through a year ago.
Stocks where I noted insider selling have trailed the Standard & Poor’s 500 Total Return Index by 2.3 percentage points over the 12-month period following publication.
For some stocks, I noted insider buying but said I would avoid the shares anyway. These have trailed the S&P by a massive 24.3 percentage points.
Stocks where I noted insider buying but made no comment, or an ambiguous comment, have beaten the index by 14.2 percentage points.
That’s all fine, but alas, the stocks I’ve recommended based on insider purchases have trailed the index by 2.8 points. The overall verdict therefore is mixed.
Bear in mind that my column results are hypothetical and shouldn’t be confused with results I obtain for clients. Also, past performance doesn’t predict the future.
Disclosure: I have no personal positions in the stocks discussed today. I own RTX and PepsiCo for a few clients.
Correction: In a mid-November column, I mistakenly said that Reinsurance Group of America Inc. (RGA) was trading at about $235. The actual price range in November was $180.65 to $190.76.
John Dorfman is chairman of Dorfman Value Investments in Boston. His firm of clients may own or trade securities discussed in this column. He can be reached at jdorfman@dorfmanvalue.com.
Deckers and Pinterest are Candidates for a January Bounce
Posted: November 25, 2025
November 24, 2025 (Maple Hill Syndicate) – It’s not only the moon that makes people do strange things. It’s taxes.
Every year around this time, investors unload their losing stocks. By doing so they get a tax deduction.
Sometimes the mass tax-motivated selling pushes stocks below their intrinsic value. That’s why frequently we see a “January bounce” in depressed stocks.
It’s not a sure thing. Sometimes the January bounce doesn’t come at all. Sometimes it starts in December. Nonetheless, I believe that this time of year is a good time to look for bargains among depressed stocks.
Here are five that I think fit the bill.
Deckers
Badly smashed, Deckers Outdoor Corp. (DECK) is down 58% year to date through November 21. This casual footwear company has two major brands: Ugg (about 51% of sales) and Hoka (about 45%). Many of its shoes are made in Vietnam.
Under President Trump, the U.S. hit Vietnam with a 46% tariff in April. That was reduced to 20% in July – less onerous but still painful.
One of the best features of capitalism is that companies adapt to changing situations, and I think Deckers can adapt. The stock currently trades at 13 times earnings, in contrast to its ten-year average of 23 times earnings.
Pinterest Inc. (PINS) runs a social-media website with an emphasis on recipes, home décor, fashion, hobbies and do-it-yourself projects. About 70% of users are women.
The stock hit a high of more than $89 during the pandemic, but has subsided to about $25 after an 18% loss year-to-date. Yet earnings are doing fine, with $1.50 per share in profit over the past four quarters, the company’s best yet.
A flock of Wall Street analysts follows the stock. Thirty-two analysts call it a “buy,” while nine say merely “hold.” With the stock selling at nine times earnings, I think it’s a good candidate for a bounce.
Fluor
Down about 19% this year is Fluor Corp. (FLR), an engineering and construction firm. It does large and diverse construction projects, from oil refineries and pipelines to casinos and nuclear power plants.
Fluor’s earnings vary a lot from year to year, and even from quarter to quarter. Its revenue is running about $16 billion a year, but the stock’s market value is only $6.4 billion.
Only about nine analysts follow it, and they are evenly split on its prospects. Their average 12-month price target is $50. Since the stock is around $40, that would work out to a 25% gain.
Daily Journal
Daily Journal Corp. (DJCO) publishes legal and business newspapers, notably the Los Angeles Daily Journal and the San Francisco Daily Journal.
The late Charlie Munger, longtime sidekick of famed investor Warren Buffett, was its chairman for 45 years. The company holds a large securities portfolio. It’s a meaningful asset, but investors were more excited when Munger was alive to guide the investments.
So far this year, the shares are down 25% as the company works on a laborious transition to selling more software. The shares go for about six times earnings. Over the past ten years, the typical multiple has been about 19.
Viper Energy
Oil commanded a price of more than $100 a barrel in early 2008. It fell to near $20 during the pandemic, then shot back to over $100 in 2022. Today it’s at about $58.
Moral: One shouldn’t extrapolate future oil prices based on recent prices. For patient investors, I like several oil-and-gas stocks. One is Viper Energy Inc. (VNOM), down about 28% this year.
It’s a majority-owned subsidiary of Diamondback Energy Inc. (FANG). While Diamondback drills wells, Viper owns land and collects royalties from drilling operations by others. Since it doesn’t pay drilling costs, it’s capital-light, and probably more stable than typical drillers.
Performance
Beginning in 2000, I’ve written 22 columns before now on January bounce candidates. The average 12-month return on my recommendations in this series has been 11.9%. For comparison, the average return on the Standard & Poor’s 500 Total Return Index has been 10.8%.
Bear in mind that my column results are hypothetical and shouldn’t be confused with results I obtain for clients. Also, past performance doesn’t predict the future.
My picks from a year ago did badly, falling 11.2%. The worst disaster was a 34% loss in Atkore Inc. For the same period, the S&P 500 returned 11.7%.
Relative to the index, it was the third-worst showing I’ve had. Let’s hope for a return to form in the coming 12 months.
Disclosure: I own Diamondback Energy for most of my clients. A hedge fund I manage owns call options on Fluor.
John Dorfman is chairman of Dorfman Value Investments in Boston. His fim of clients may own or trade securities discussed in this column. He can be reached at jdorfman@dorfmanvalue.com.
Five Dividend Aristocrats I Recommend Now
Posted: November 18, 2025
November 17, 2025 (Maple Hill Syndicate) – Should you go aristocratic?
A dividend aristocrat is a company that has raised its dividend every year for the past 25 years. At the moment, there are 68 of them.
These companies are obviously, in a sense, elite. They have demonstrated staying power and a willingness to share the wealth of their enterprise with stockholders.
A dividend aristocrat is not, however, necessarily a buy. The company may be straining to pay its dividend, or even borrowing to pay it. Or it may be funding the dividend with money that ought to be spent on modernizing and improving the business.
Here are five stocks that are dividend aristocrats and also are, in my judgment, good buys now.
A.O. Smith
Look at the water heater in your basement. There’s a fair chance it was made by A.O. Smith Corp. (AOS).
The stock market hasn’t been very kind to A.O. Smith. In the past year it stock has sunk 9.5%. In the past ten years, the compound annual return has been 7.3%, which is half the annualized total return on the Standard & Poor’s 500.
Yet, I think highly of the company. Its return on equity (a measure of profitability) is about 28%. I consider 15% good and 20% excellent.
What’s more, A.O. Smith has very little debt. Debt is only 12% of stockholders’ equity, a nice low figure.
Franklin Resources
A mutual fund giant, Franklin Resources Inc. (BEN) manages about $1.6 trillion, mostly in stock and bond funds. It’s done even worse than A.O. Smith, with an annualized return of negative 1% over the past decade.
Two intersecting trends hurt Franklin. Investing in index funds has become increasingly popular. Franklin is known for actively managed funds. Also, exchange-traded funds (ETFs) have taken market share from traditional mutual funds.
It’s fair to say that Franklin was late to the party in ETFs, but it now offers a wide variety of them. And I expect active management to become more popular again.
J.M. Smucker
J.M. Smucker Co. (SJM) is probably best known for its eponymous jam, but its biggest product category is coffee, including the Folgers brand. Some of its other products are pet food (Milk Bone and Meow Mix), peanut butter (Jif) and snack cakes (Hostess).
The stock is down about 2% this year, and the same for the past decade. It has several problems, but one of them – the tariff on coffee – is about to be solved. The Trump administration, recognizing public indignation about food prices, says it will eliminate this tariff.
My other reason for liking the stock is this: Unfortunately, I think the U.S. will be in recession by May 2026. Consumer-staples companies like Smucker usually hold up pretty well in recessions.
Johnson & Johnson
Based in New Brunswick, New Jersey, Johnson & Johnson is the largest drug company in the U.S. by market value, and calls itself the world’s largest healthcare company. Its net profit margin of 27% is remarkable, as is its profitability (33% return on stockholders’ equity).
Considering these virtues, the stock seems reasonably priced to me at 19 times earnings. It is up about 36% this year but was stagnant for four years before that. Over the past decade, J&J stock has sold for a median of about 24 times earnings, so it seems attractive to me at the current quote.
General Dynamics
I have held General Dynamics Corp. (GD) shares for years, and recommended it from time to time in this column. The big defense contractor should have a tailwind from increased military spending by European nations, and public support for the defense industry in the U.S.
For that, the company can thank our enemies, notably Vladimir Putin’s Russia, Xi Jinping’s China, Iran and North Korea. The stock is up about 32% year-to-date through November 14, but I expect further gains.
Performance
Depending on definitions, this is either the first or second column I’ve written about dividend aristocrats. Two years ago, I wrote about dividend kings – stocks that have raised their dividend each year for 50 years.
I recommended seven of the kings (which by definition are also aristocrats). They returned 21.5% in 12 months, a figure that normally would thrill me. However, the Standard & Poor’s 500 Total Return Index was up 24.3% for the same period.
Bear in mind that my column results are hypothetical and shouldn’t be confused with results I obtain for clients. Also, past performance doesn’t predict the future.
Disclosure: I own General Dynamics shares personally and for most of my clients. I own Johnson & Johnson for one or more clients.
John Dorfman is chairman of Dorfman Value Investments in Boston. His fim of clients may own or trade securities discussed in this column. He can be reached at jdorfman@dorfmanvalue.com.
Conagra and Beazer Homes Look Good Based on Book Value
Posted: November 11, 2025
November 10, 2025 (Maple Hill Syndicate) – A classic stock-picking technique that has fallen into disuse is the price-to-book-value ratio.
Ben Graham, widely considered the father of value investing, liked stocks selling “below book.” I still do, although they are rarer today than they were in Graham’s Day.
Book value is a company’s net worth – its assets minus its liabilities – usually expressed per share of common stock. The price-to-book ratio is a company’s stock price divided by its book value.
Annually, I publish a set of recommendations on companies selling at an attractive price-to-book ratio. I like 2.0 or less, and love 1.0 or less. Here are five new picks.
Conagra
You may not recognize the name of Conagra Brands Inc. (CAG) but you certainly know some of its brands: Banquet, Birds Eye, Chef Boyardee, Duncan Hines, Healthy Choice, Hunt’s, Marie Callender’s, Orville Redenbacher’s, Reddi-wip, Slim Jim, Vlasic and Wish-Bone.
It’s a tough environment these days for packaged-food companies. The cost of their raw materials is up. With the economy slowing, consumers are cutting back or looking for cheaper alternatives.
Conagra’s debt is near the top of the range I usually find acceptable. But I think the company has staying power because of that batch of famous brands. At 0.92 times book value, it’s a bargain in my judgment.
Beazer Homes
High mortgage rates have hobbled home sales last year and this year. But I believe there is lots of pent-up demand for houses, and one beneficiary could be Beazer Homes USA Inc., which sells for only 0.54 times book value – one of the cheapest valuations around.
Beazer is a smallish stock, with a market value of $652 million. (I classify over $10 billion as large, under $1 billion as small.) Only five Wall Street analysts deign to cover it. But of those five, four recommend it.
The company’s debt is on the high-side of my preferred range. But over the past ten years, it has improved its debt-to-equity ratio considerably.
United Fire
Slightly larger, but still in small-stock territory, is United Fire Group Inc. (UFCS). Based in Cedar Rapids, Iowa, it sells property-and-casualty insurance in all 50 states. Wall Street has barely heard of it. Only three analysts cover it and only one recommends it.
At about $35, the stock sells for exactly book value. Apparently, that’s an attractive price to some insiders. Two directors have added a bit to their holdings this year, as has Eric Martin, the chief financial officer.
Reinsurance Group
Based in Chesterfield, Missouri, Reinsurance Group of America Inc. (RGA) is one of the larger reinsurance companies in the world, and the largest in the United States.
For most reinsurers, profits depend in large part on the frequency and severity of earthquakes, hurricanes and tornados. That’s less so with RGA, since it concentrates on reinsuring life insurers and health insurers.
Its stock sells for about $235 a share, but it has about $70 a share in cash, so investors are paying about $165 a share for the operating business The company has reported a profit in each of the past 30 years. The stock sells for just under book.
Citizens Financial
Finally, I will bring back one of my choices from last year, Citizens Financial Group Inc. (CFG). It’s a bank based in Providence, Rhode Island, serving customers in 14 states with about 1,100 offices.
Profitability at Citizens has often been mediocre in the past. But it has grown its profits 10.5% in the past four quarters, reduced its number of shares outstanding, and improved its debt ratios.
The stock sells of 0.94 times book.
Performance
Beginning in 1998, I’ve written 25 columns about stocks with attractive price-to-book ratios. (Today’s is the 26th.) The average one-year return on my picks has been 18.3%, outdistancing the 13.0% average for the Standard & Poor’s 500 Total Return Index.
Bear in mind that my column results are hypothetical and shouldn’t be confused with results I obtain for clients. Also, past performance doesn’t predict the future.
My low-price-to-book selections have been profitable 17 times out of 25, and beaten the index 16 times.
Last year was not one of those times. My choices did terribly, declining 14.0% while the S&P returned 13.6%. Three of my four picks fell. The worst loser was Kelly Services Inc. (KELYA), down 39%.
G-III Apparel Group Ltd (GIII) and Molson Coors Beverage Co. (TAP) also declined. My only winner was Citizens Financial, up 15%.
Despite the bad result in the past 12 months, I still have a lot of faith in this stock-picking method.
Disclosure: I don’t own the stocks discussed in today’s column personally or for clients.
John Dorfman is chairman of Dorfman Value Investments in Boston. His firm of clients may own or trade securities discussed in this column. He can be reached at jdorfman@dorfmanvalue.com.
Among High Flyers, I Like Western Digital and Micron
Posted: November 04, 2025
November 3, 2025 — (Maple Hill Syndicate) – Robinhood Markets Inc. is the biggest gainer of the 503 stocks in the Standard & Poor’s 500 Index this year through October. It’s up 294%.
Second place goes to QuantumScape Corp. (QS), up 255%. Then come Western Digital Corp. (WDC) at 234%, Micron Technology Inc. (MU) at 167% and Palantir Technologies Inc. (PLTR) at 165%.
Are any of these stocks still good buys, after their spectacular success in the past ten months?
In my opinion, two of them are. I expect Western Digital and Micron to show sharply higher earnings in the next couple of years. The other three, in my opinion, need to take a breather for earnings to catch up with current valuations.
Western Digital
The massive rush to build data centers for artificial intelligence (AI) computing has helped Western Digital immensely. It makes high-capacity hard disk drives that can store the data AI generates.
Twenty-seven Wall Street analysts follow Western Digital. Twenty-two of them rate the stock a “buy,” while five call it a “hold.”
When analysts move in a flock, I often go the other way. In this case, I think the analysts are correct. I believe that Western Digital will continue to be one of the beneficiaries of the AI boom. The company is experiencing an earnings revival, after a stretch of mediocre-to-poor earnings in 2016-2024.
At 22 times earnings, I don’t think this stock is overpriced.
Micron
Micron Technology’s specialty is memory and storage chips. The company struggled for even longer than Western Digital, but now, as the song says, “happy days are here again.” Due to AI demand, Micron posted record sales and earnings in its latest fiscal year (ended in August).
Particularly in demand is its HBM3E chip. The first three letters stand for high bandwidth memory. Micron is one of the world’s largest makers of memory chips (which make up about a quarter of worldwide chip sales).
At 29 times reported earnings, Micron seems expensive. However, the recent stock price (about $224) is less than 14 times the earnings that analysts expect for the fiscal year in progress.
Robinhood
Robinhood Markets has done a lot to democratize the stock market, bringing younger and more speculative investors into the fray.
Robinhood permits – some would say encourages – its customers to trade risky securities such as one-day options. Will that land it in legal trouble?
I don’t think the company has much to fear from the Securities and Exchange Commission. The regulatory philosophy of the Trump administration, in my opinion, is “anything goes.”
However, I do think that Robinhood may be nicked by lawsuits over investment suitability. And the stock is expensive, selling at 71 times earnings and 38 times revenue.
QuantumScape
QuantumScape, out of San Jose, California, is developing “next generation” solid-state lithium-metal batteries for electric cars and other purposes. What is hasn’t developed, in five years as a public company, are profits.
Eight Wall Street analysts follow the company and only one recommends it. That hasn’t stopped the stock from tripling this year.
Palantir
Based in Denver, Palantir makes data analysis software used mostly by governments and defense companies. It works only with “entities in Western-allied nations.” Sales were under $1 billion as recently as 2019 but are well above $3 billion a year now.
A skein of losses ended in 2022 and earnings have grown rapidly since. But the stock’s valuations are off the charts: 668 times earnings, 147 times revenue and 80 times book value (corporate net worth per share). No wonder analysts are dubious, with only six “buy” ratings among the 25 analysts who follow it.
Performance
The high flyers I’ve recommended in previous columns on the year’s biggest gainers have returned 16.9%, just barely edging out the performance of the Standard & Poor’s 500 Total Return Index over the same periods.
Bear in mind that my column results are hypothetical and shouldn’t be confused with results I obtain for clients. Also, past performance doesn’t predict the future.
A year ago, I didn’t recommend any of the year’s best gainers to that point. Nonetheless, they went on to march up 83%, on average, over the past 12 months. AppLovin Corp. (APP) led the parade, putting up a 300% gain, on top of 310% the year before.
Vistra Corp. (VST) advanced 64% and Carvana Co. (CVNA) 36%. MicroStrategy Corp. (MSTR), which now is called Strategy, gained 21%. The only loser in the bunch was Summit Therapeutics (SMMT), which declined 5%.
Disclosure: A hedge fund I manage has a short position in Strategy.
John Dorfman is chairman of Dorfman Value Investments LLC in Boston, Massachusetts, and a syndicated columnist. His firm or clients may own or trade securities discussed in this column. He can be reached at jdorfman@dorfmanvalue.com.
Geraldine Weiss Had an Interesting Formula
Posted: October 28, 2025
October 27, 2025 (Maple Hill Syndicate) – When a stock sports a dividend yield above its own historical average, one of two things has happened.
The company may have raised its dividend – usually a good sign. Or, the dividend yield may have gone up because the stock’s price went down. That suggests there’s been bad news, but it hints at a possible bargain.
Some investment professionals seek out stocks whose dividend yield is above their own normal level. Probably the best-known practitioner of this approach was the late Geraldine Weiss, who wrote a book called Dividends Don’t Lie.
I wrote a column about the Geraldine Weiss approach in September 2024. The five stocks I selected returned 23.4% in the ensuing year, beating the Standard & Poor’s 500 at 17.6%. Those figures are total returns, both price gain (or loss) and dividends.
Bear in mind that my column results are hypothetical and shouldn’t be confused with results I obtain for clients. Also, past performance doesn’t predict the future.
I’d like to give Weiss’s approach another try. Here are four stocks that look good to me now, based on her method.
EOG Resources
The infamous Enron Corp., which went down in the flames of accounting fraud in 2001, has several surviving children. One is EOG Resources Inc. (EOG); the initials once stood for Enron Oil & Gas.
Based in Houston, EOG produces the equivalent of more than one million barrels of oil a year. Its mix is about 31% natural gas and 69% oil and natural-gas liquids.
Over the past ten years, EOG’s typical dividend yield has been about 1.8%. Today the yield is 3.7%. Geraldine Weiss fans, take note.
EOG has been increasing its dividend rapidly in recent years. In 2019 the dividend was $1.01 a share. In the past four quarters the payout has been $3.77.
Molson Coors
Molson Coors Beverage Co., a brewer based in Golden, Colorado, has averaged a 2.5% dividend yield over the past decade. Today the stock yields 4%.
The shares have done miserably over the past ten years, losing close to half of their value. Many investors think that beer is a buggy-whip industry. U.S. beer sales have been declining, and imports are grabbing an increasing share of a shrinking pie.
Sensibly, Molson is trying to diversify away from beer, offering hard cider, hard seltzer, canned cocktails and energy drinks.
Novo Nordisk
These days, many investors think of Novo Nordisk AS (NVO), which is based in Denmark, primarily as a weight-loss drug maker. I, however, think of it primarily as a leader in diabetes medications.
The stock peaked at about $147 last year, and has descended all the way to $53 as Eli Lilly & Co. (LLY) has moved to the front in weight-loss drugs. After its fall, Novo Nordisk shares yield 3.3%, well above the ten-year median of 1.9%.
The company’s net profit margin is above 35% and its return on stockholders’ equity is about 81%. Even if those figures decline some, I think the stock is a bargain, selling for about 14 times earnings.
Interparfums
Based in New York City, Interparfums Inc. makes and sells perfume and cologne under a wide variety of licensed brands, such as Coach, Karl Lagerfeld, Montblanc and Van Cleef & Arpels. Its dividend yield has normally been about 1.7%. Now it’s 3.2%.
The stock has declined, partly because sales and earnings growth have slowed, and perhaps partly because investors fear a recession. It peaked at about $158 five years ago, and now sells for around $96.
I think the decline is overdone. Growth was still pretty good in the past year, with sales up 7% and earnings up 17%.
Performance
My maiden column discussing Geraldine Weiss’s approach was encouraging, as three of my five picks beat the S&P 500’s return, and all five were profitable.
The best performer was UGI Corp. (UGI), which distributes natural gas, propane and electricity, mostly in Pennsylvania and West Virginia. It returned 43% (including dividends).
Walgreens Boots Alliance Inc. (WBA) attracted a takeover offer from a private equity firm, Sycamore Partners. It returned more than 37%.
Also beating the index, but by a narrower margin, was Magna International Inc. (MGA), a Canadian auto parts maker. Considering the trade frictions (and other frictions) between the U.S. and Canada, I’m pleasantly surprised.
US Bancorp. (USB) and Greif Inc. (GEF.B) returned 10% and 4% respectively, trailing the index.
Disclosure: I own Novo Nordisk personally and for most of my clients. Katharine Davidge, my wife and a portfolio manager, owns EOG personally and for clients.
John Dorfman is chairman of Dorfman Value Investments in Newton Upper Falls, Massachusetts. His firm or clients may own or trade the stocks discussed here. He can be reached at jdorfman@dorfmanvalue.com.
Hedge-Fund Favorites Rose 23% in the Past Year
Posted: October 21, 2025
October 20, 2025 (Maple Hill Syndicate) – A bright young intern just left my firm to work for a New York hedge fund.
That was bad news for me, but not unusual in the financial world. Hedge funds are magnets for talent, partly because in good years they can pay handsome bonus checks.
Gurufocus.com maintains a screen of stocks popular with hedge funds. A year ago, I selected five of these stocks to recommend. They have risen 23.6%, leaving the Standard & Poor’s 500 Total Return Index in the dust at 15.3%.
Frankly 15.3% is a fine year. But 23.6% is better, so let’s play this game again. Here are five hedge fund favorites that appeal to me now.
Taiwan Semiconductor
Every major semiconductor company that I know of, with the exception of Intel Corp. (INTC), uses Taiwan Semiconductor Manufacturing Co. (TSM) to make its chips. TSM has expertise, precision and economies of scale.
It also has a net profit margin of 42%, astoundingly high. Yet because Taiwan lives under a sword of Damocles – the threat of Chinese invasion – the stock is not horribly expensive.
It sells for 30 times recent earnings, and 26 times the earnings analysts expect in 2026. Al Gore, U.S. vice president under President Clinton, is one of many investment managers who own it. He is the co-founder of Generation Investment Management, based in London.
Berkshire Hathaway
Warren Buffett, the legendary CEO of Berkshire Hathaway Inc. (BRK.B), one described hedge funds as a compensation scheme disguised as an asset class. That hasn’t stopped hedge funds from investing in Berkshire.
Buffett will step down as chief executive at the end of this year. But I think highly of the team that will succeed him, beginning with Greg Abel as the next CEO.
Berkshire’s debt-to-equity ratio is a nice low 19%. If the U.S. economy happens to get into trouble, Berkshire could rescue other companies on favorable terms, as it did in the past with Bank of America, Goldman Sachs and General Electric.
Walmart
I’m on record as having predicted that the U.S. will be in recession by May 2026. Could I be wrong? Sure. But I see auto loan defaults rising, along with credit-card delinquencies. I see hiring petering out. And I think that tariffs and deportations are counterproductive for the economy.
One firm that usually holds up well during economic downturns is Walmart Inc. (WMT). It is famous for its low prices. During recessions it can hold onto most of its previous customers, and get new ones who are trading down.
Regrettably, at $107 a share, the stock’s valuation ratios are high. I would nibble if it falls below $100 and buy with enthusiasm at $90.
JPMorgan Chase
JP Morgan Chase & Co. (JPM) chairman Jamie Dimon remarked this month that soured bank loans are like “cockroaches.” You rarely see just one. JPMorgan Chase has been pretty successful in avoiding bad loans, although it did suffer some notoriety from its relationship with sex offender Jeffey Epstein.
One thing I look for in a bank stock is a return on assets of 1.00% or more. JPMorgan Chase has done that in six of the past seven years, and seems certain to do so again this year.
If the Federal Reserve cuts short-term interest rates, but rates on longer-term loans such as mortgages stay close to where they are now, it would be a Goldilocks scenario for JPMorgan.
Caterpillar
Caterpillar Inc. (CAT), which makes bulldozers and other construction equipment, is looking at good news and bad news. The good news is that the dollar is weak, which helps the company export. More than half its sales usually come from outside the U.S.
The bad news is that the Trump administration is slapping a lot of tariffs on imports, inviting retaliation. My guess is that the dollar effects will outweigh the tariff effects.
Performance
The good performance of the hedge-fund favorites I recommended a year ago was sparked by H&E Equipment Services Inc., which sold itself to Herc Holdings Inc. (HRI) in June at a 68% gain.
Customers Bancorp. Inc. (CUBI) also did well, returning 29%. On the flip side, D.R. Horton Inc. (DHI) stumbled to a 14% loss as homebuilding languished. In between those extremes, Loews Corp. (L) achieved a 22% return, and Toyota Motor Corp. (TM) notched 13%.
Figures are total returns including dividends, from October 28, 2024 through October 16, 2025.
Note that my column results are hypothetical and shouldn’t be confused with results I obtain for clients. Also, past performance doesn’t predict the future.
Disclosure: Personally, and for most of my clients, I own Taiwan Semiconductor, Berkshire Hathaway, and JPMorgan Chase.
John Dorfman is chairman of Dorfman Value Investments in Boston. His firm of clients may own or trade securities discussed in this column. He can be reached at jdorfman@dorfmanvalue.com.
Step Into the Shadows, and Take a Peek at my Purloined Portfolio
Posted: October 14, 2025
October 13, 2025 – Do you keep an eye on your competition? Of course you do. Competition research is common sense. When you think a competitor has a great idea, adopt it or adapt it.
In that spirit, once a year I compile a Purloined Portfolio, consisting of one stock from each of five rival investment managers I respect. Here goes.
Scott Black
I’ve always been a fan of Scott Black, who heads Delphi Management in Boston. Black is a major art collector and Democratic Party donor. He is featured in Barron’s magazine each year on its stock-picking panel.
From his holdings, I select Berkshire Hathaway Inc. (BRK.B). Berkshire has been run for six decades by investment legend Warren Buffett, who plans to relinquish the helm at the end of this year. I think he has a good team in place, led by Greg Abel, who will be the next CEO.
I regard Berkshire as the country’s most successful conglomerate. I don’t advocate breaking it up, but if Abel needed or wanted to sell off some of the pieces, I think he could reap high valuations for many of them.
Randall Eley
Randall Eley runs pension-fund money and the Edgar Lomax Value Fund (LOMAX) in Alexandria, Virginia. His largest holding is CVS Health Corp. (CVS). You might be surprised by this choice, since the stock has lost 24% of its value over the past decade.
I think CVS is poised for a comeback. One of its competitors, Rite Aid, has declared bankruptcy and ceased operations. Its largest competitor, Walgreens, seems to me to have lost some of its mojo.
CVS is considering selling or splitting off Caremark (a pharmacy benefits manager) and Aetna (a health insurer). I’m in favor of such a move. I believe that pharmacy benefits management has built-in conflicts of interest.
As for health insurance, I think it’s a difficult business because of rising health-care costs. The core drugstore business is the one that most appeals to me.
Bernard Horn
A veteran international stock picker, Benard (Bernie) Horn runs the Polaris Global Value Fund. From his holdings I draw Mitsubishi UFJ Financial Group Inc. (MUFG). It’s the largest bank in Japan, and also owns approximately 23% of Morgan Stanley, a big investment bank in the U.S.
In the past four quarters, Mitsubishi UFJ has seen profits climb 29%, on a 10% increase in revenue. Most analysts expect growth to slow down. Should you buy it? Analytical opinion is split, but I think the present valuation (14 times recent earnings and 1.3 times book value) leaves room for more gains.
David Katz
Matrix Asset Advisors in New York City manages a little over $1 billion, with David Katz as chief investment officer. One of the stocks he owns is L3 Harris Technologies Inc. (LHX), a defense contractor that specializes in military electronics.
I think that ISR – intelligence, surveillance and reconnaissance – is already vital to national defense, and will become even more so. That’s why I like L3 Harris even though it’s more expensive than I normally go for. The stock trades at 33 times recent earnings and 24 times estimated earnings.
Nicole Kornitzer
The Buffalo International Fund, run by Nicole Kornitzer, is up more than 16% this year through October 10. From Kornitzer’s holdings, I choose the same stock I did last year, Taiwan Semiconductors Manufacturing Co. (TSM). In the past year, it’s up 47%.
It might seem crazy to hope for more, but I do. Every major semiconductor company I know, except Intel Corp. (INTC), uses TSM to manufacture its chips. Thus, TSM is at the very heart of the global economy. Of course, there is geopolitical risk: An invasion of Taiwan by China is a real threat.
The Record
In the past year (October 14, 2024 through October 10, 2025) my Purloined Portfolio returned 20.1%, including dividends. That handily beat the Standard & Poor’s 500 Total Return Index, which returned 13.3%.
Leading the charge was Taiwan Semiconductor’s 47% return. Also doing well was J.P. Morgan Chase & Co. (JPM), drawn from David Katz’s holdings. My worst selection was Schlumberger Ltd. (SLB), which declined 27%.
The long-term results are also favorable. In 21 years, my Purloined Portfolios have averaged 13.2%, while the S&P 500 has averaged 11.6%.
Bear in mind that my column results are hypothetical and shouldn’t be confused with results I obtain for clients. Also, past performance doesn’t predict the future.
Of the 21 stolen-idea lists, 17 have been profitable and 11 have beaten the S&P.
Disclosure: I own Berkshire Hathaway, J.P. Morgan Chase, Mitsubishi UFG and Taiwan Semiconductor personally and for most of my clients.
John Dorfman is chairman of Dorfman Value Investments in Boston. His firm of clients may own or trade securities discussed in this column. He can be reached at jdorfman@dorfmanvalue.com.
Hormel and Amdocs Hit the Casualty List
Posted: October 07, 2025
October 6, 2025 (Maple Hill Syndicate) – Stocks that have been banged up, and that I believe have underlying strengths, are some of my favorites.
They are also fodder for my quarterly Casualty List. I’ve compiled this list since 2000, and it has beaten the Standard & Poor’s 500 Total Return Index by a decent margin.
The latest quarter was a good one for the market, with the S&P 500 returning about 8%. But some stocks were still roughed up, and I think I see a few that can survive and thrive. Here are five of them.
Hormel Foods
You probably associate Hormel Foods Corp. (HRL) with ham and bacon, its best-known products. But it owns about 40 brands, including Dinty Moore, Herb Ox, Lloyd’s, and Planters. It sells its foods in some 80 countries.
The stock fell 17% in the third quarter, mostly because rising costs for pork and beef are squeezing its profit margins. At the stock’s recent price of about $25, it sells for 1.1 times revenue and 2.7 times book value (corporate net worth). I find those multiples attractive.
Wall Street is unenthusiastic about the stock, with only two analysts rating it a “buy” out of a dozen who cover it. But I like the company’s historical record. Hormel went public in 1928, and has never posted a loss. That’s a 97-year profit streak.
Amdocs
Amdocs Ltd. (DOX), based in Lt. Louis, Missouri, provides software and services to communications and entertainment companies. Its software is used in streaming and in mobile phone service, among other things. Historically, its biggest customer has been AT&T.
Although the stock was down more than 9% in the latest quarter, analysts are keen on it. Seven Wall Street analysts cover it, and six of them recommend it.
In the past year, revenue at Amdocs fell about 3%, but earnings were actually up. The revenue decline happened because Amdocs was shedding some low-margin businesses.
Eastman Chemical
I mentioned Eastman Chemical Co. (EMN) recently in a column about insider purchases. On August 27, Mark Costa, the company’s chief executive officer, spend just over half a million dollars to increase his stake.
On the same day, William Thomas McLain Jr., the chief financial officer, spend about $252,000 to add to his holdings. Nine other insiders made smaller purchases.
Their buys came in the midst of a quarter during which Eastman Chemical shares fell 17%. I believe signs of a slowing economy were the reason for the drop. Short-term, the pessimists may be right. But I think Eastman is a good holding for longer-term investors.
LKQ Corp.
Based in Antioch, Tennessee, LKQ Corp. (LKQ) recycles auto parts. It operates some 1,500 high-tech junkyards in the U.S. and Europe, selling parts to body shops and repair shops.
I figure that car prices in the U.S. will be rising, mostly because of tariffs. Therefore, people may keep their cars longer, which would help the recycled-parts business.
LKQ shares declined almost 17% in the past quarter as both sales and earnings for the second quarter missed expectations. Much of the soggy result came from European operations. I’m not sure, but it looks to me like economies in Europe are starting to perk up.
Ingredion
Ingredion Inc. (INGR) makes ingredients for foods and beverages, including brewing and animal feed. Sweeteners (high fructose corn syrup and stevia) are a specialty.
Although Ingredion’s revenue dipped in the past year, earnings were strong. So, I find it surprising that the stock fell 9% last quarter.
I consider a return on stockholders’ equity of 15% to be excellent. Ingredion has achieved that in 11 of the past 15 years. The stock seems cheap to me at 12 times earnings.
Performance
My Casualty List selections over the years have averaged a 14.3% return in 12 months. For comparison, the Standard & Poor’s 500 Total Return Index has averaged 11.6% over the same periods.
Those averages are based on 86 Casualty Lists, beginning in June 2000. The list you’ve just read is the 90th, but it’s too soon to calculate one-year returns for the latest few.
My Casualty List picks have been profitable in 54 cases out of 86, but have beaten the index only 39 times. On average, my wins have been by a greater margin than my losses.
Of my four picks a year ago, only Visteon Corp. (VC) excelled, rising nearly 32%. Occidental Petroleum Corp. (OXY) was the stinker, falling 18%. Amkor Technology Inc. (AMKR) was close to unchanged, while Humana Inc. (HUM) rose about 22%.
That works out to a 9.01% return for the October 2024 portfolio, which fell well behind the 19.44% total return for the S&P 500.
Disclosure: I don’t currently own any of the stocks discussed in today’s column, personally or for clients.
John Dorfman is chairman of Dorfman Value Investments LLC in Boston, Massachusetts. He or his clients may own or trade securities discussed in this column. He can be reached at jdorfman@dorfmanvalue.com.