Watchlist: 27 Founder-Led Compounders, and the Exact Price I’d Pay for Each
Here is my investing universe.
Once or twice a week, someone asks me the same thing. What is actually on your watchlist?
A list of great companies is the easy part. The hard part is that a great business and a great investment are not the same thing.
Overpay for a wonderful company, and you can sit on a flat result for a decade while it does everything right. Most watchlists tell you what is good and go quiet on what it is worth.
This one does both.
How I find them
I fish where the big funds cannot follow. Neglected smaller companies in places like Sweden, the UK, Germany, Norway, and Australia, mostly under a couple of billion in value, with thin analyst coverage and a founder who still owns a large slice.
Then I screen for the things that do not lie: a high return on capital held for years, earnings that turn into real cash, little or no debt, and profits being put back to work rather than paid away.
What earns a place
The screen hands me a hundred maybes. Almost all of them fail.
A name only makes the list when it clears every one of these:
A founder or owner-operator still in the chair, with their own money on the line, not a hired hand collecting options.
A moat I can name in one sentence. A product a customer would be slightly mad to rip out, a network that gets stronger as it grows, a niche monopoly in something like medical devices, or a serial acquirer that compounds by buying well.
A balance sheet strong enough that the company controls its own fate.
A long runway, room to keep reinvesting its own profits at a high rate for
years, rather than a pond already fished out.
A reason competitors lose. Ideally, a moat that widens as the business grows instead of one it has to keep spending to defend.
How you can do this yourself
The order matters more than any single number. Start with the return on capital and who owns the shares, because that tells you fast whether a business is worth a second look. Then ask the only moat question that counts: could a rich, clever rival take these customers within five years?
If yes, move on. If no, ask where the business lands in fifteen to twenty years, and whether that destination is large and reasonably secure. Then work out what it is worth on owner earnings, the cash a private owner could actually keep, never headline profit. And only then look at the price. Price is the last question, and the one that decides everything.
The part most people skip
For every company on the list, I publish a Fat Pitch Price.
It is the price I would pay today, no hesitation, because the margin of safety is finally wide enough that I am being paid to be wrong. I reach it the slow way, and then I wait, often for years.
Most of the time, the price never comes.
As I write this, several of these companies are closer to their Fat Pitch Price than they have been in a long time, and one or two sit within a modest pullback of it. That is rare. For most of the past few years, this list has been a waiting room. Right now, a few names are stirring.
Get the full list
The names, the rankings, the Fat Pitch Price for each one, the margin of safety behind it, and a plain note on why each moat holds and the one thing that would break it are below for paid subscribers.
This is my own inventory for my own book, not financial advice. Treat every name as the start of your own work, not the end of it.