u/Wonderful-Finish4822

I started tracking these monthly in July because I wanted to compare opportunities against each other instead of looking at every stock on its own.

This is not a ranking of the best companies or simply the lowest P/E ratios. It is my own view of which ones have the best chance of outperforming the S&P 500 over roughly 3–5 years from the current price.

I look at normalized earnings and cash flow, dilution, valuation a few years out and what could go wrong. It is not mechanical. Judgment still matters a lot.

September Top 10

1. Intuit
2. RELX
3. Adobe
4. Autodesk ↑4
5. Experian ↑1
6. Constellation Software ↓1
7. NVIDIA ↓1
8. Broadcom — new
9. Meta ↓5
10. Tencent ↓1

Autodesk is the biggest move. Nothing dramatic happened to the business in September. The stock fell about 19%, which was enough to make the valuation much more interesting to me.

Broadcom enters at #8 after earnings. The results were strong, but this is one of the placements I struggled with most. More of the growth, engineering effort and capital is tied to AI infrastructure than the segment labels probably suggest.

Meta went from #4 to #9. I still like the business, and WhatsApp and Instagram probably have more monetisation potential over time. But after the stock rose around 27%, there is simply less room for error.

Intuit, RELX and Adobe stay at the top.

Intuit is still the valuation that surprises me most. RELX keeps doing what I want it to do. Adobe is the one I am least sure about: the valuation is low, but I can much more easily imagine AI changing parts of Adobe’s business than RELX or Intuit.

One thing I keep noticing is how much these rankings can move without the businesses changing very much. Sometimes price really is the main new information.

Adobe at #3 and Broadcom at #8 are probably the two placements I would push back on myself the most.

Which one do you think I’m more wrong about?

Full September write-up: https://michaelhillaert1.substack.com/p/valuation-dislocation-september-2026?r=6vawcp

I recently watched a short documentary about water tensions between Egypt and Ethiopia over the Nile dams.

I found it quite ironic since Egypt is building enormous new satellite cities in the desert. These cities are usually very spread out and depend on vast amounts of new transport infrastructure and energy.

So I wondered if Ethiopia was doing something similar in its trajectory.

What I found out was quite interesting.

Car ownership is still low, while walking and public transit make up most trips. The country has banned the import of new combustion engine cars. (first in the world apparently) The capital Addis Ababa also seems to invest quite heavily in pedestrian, cycling and BRT infra.

Of course, not all is positive. Addis has still relatively low living standards, LRT has had problems, some of the new developments were controversial human rights wise. Also, high walking shares partly reflect low incomes.

But that makes the next few decades more interesting.

Could Addis actually become a much more prosperous megacity without first becoming car dependent? Or will rising incomes and perhaps cheap EVs lead to the same congestion and sprawl long term?

Curious how people here see Addis’s trajectory.

Sources: OECD on Egypt’s new urban communities; ITDP on Addis modal share and cycling plans; AFD on BRT/LRT; Bloomberg on Ethiopia’s ICE-car import ban; Amnesty International on redevelopment concerns.

I also posted this as a Substack Note with the Addis photo here: https://substack.com/@michaelhillaert1/note/c-347817407?r=6vawcp&utm_source=notes-share-action&utm_medium=web

I keep a monthly ranking of companies where I think the market is pricing in too much pessimism relative to the quality of the business.

What I’m looking for is a decent chance of outperforming the S&P 500 over 3–5 years, taking valuation, business quality and risk into account.

My August Top 10, using 31 August prices:

1. Intuit
2. RELX
3. Adobe
4. Meta
5. Constellation Software
6. Experian
7. Nvidia
8. Autodesk
9. Tencent
10. Microsoft

A few worth explaining:

Intuit

Still my #1. Around 15x FY27 earnings.

Revenue growth has slowed, but margin expansion should allow profits to grow quite a bit faster. Customer growth is what I’m watching most. If that stabilises, I think the market is too pessimistic. If it keeps weakening, the case gets harder.

I also lean towards AI strengthening Intuit’s position as a financial system of record.

Adobe

Probably the one people will disagree with most.

At around 11x forward earnings, a lot of AI disruption seems priced in already. Some of that disruption is real, but subscription growth is still double digit and AI usage is increasing.

My view is that Adobe doesn’t need to dominate the AI transition for the stock to work from this valuation.

Meta

Moved higher this month. I think people underestimate how difficult its social infrastructure is to replace.

The business doesn’t have to deliver everything investors hope for around AI to justify its valuation. Heavy spending still matters, though.

Nvidia

Entered the Top 10 after Q2.

At roughly 17.5x forward earnings, I think there is room for some normalisation. But that depends on how sustainable those earnings turn out to be.

Financing risk further down the AI chain, cash conversion and eventual cyclicality keep it below some of the others.

Tencent

Around 13x forward earnings looks cheap for the business.

But I apply a bigger discount for governance, capital controls, shareholder-access risk and heavy AI spending. Those are part of the valuation case.

Why no Alphabet?

It’s outside the Top 10, in my shadow ranking. I like the business a lot, and recent results made me less worried about AI disrupting Search.

But at a higher valuation, with much heavier capital spending, I don’t currently see the same 3–5 year opportunity as in some of the names above.

I also keep a separate 30-year ranking, where current valuation matters less and business durability and long-term compounding matter more. The order is different because the question is different.

I publish the ranking monthly, with the reasoning and what changed from the previous month. If you’re interested in following how these views develop, the full August post is here:

August valuation dislocation ranking

Which placement do you disagree with most, and why?