Quick Value #278 - Watchlist Notes

Outlining part of my investment process: 1) my sourcing list for new "top of funnel" ideas; 2) the first pass filter for working the sourcing list; and 3) the core watchlist.

Today’s post:

• Sourcing list + “first pass filter”

• Ideas currently on the sourcing list

• My watchlist process and stock tracker

This week’s Quick Value is a bit different… Normally, I do a surface-level review of a new idea (check out recent write-ups here), but today I want to share some notes on my watchlist process and cover a few names on that list.

At a high level, I (ir)regularly maintain 2 lists: 1) a sourcing list for top of funnel ideas; and 2) a primary watchlist(s) to closely monitor names I’ve already reviewed.

1) Sourcing ideas / first pass filter

Every investor has a formal/informal process for sourcing and tracking new ideas. Mine is akin to “management by wandering around,” it’s unstructured, but results in a nice compilation of research to-dos.

I’m a habitual notetaker and I’ll never kick the habit of tracking thoughts and ideas with good ol’ pen and paper.

Every month or so, I cobble together a list of ideas sourced from Twitter/X, Substack blogs, articles, papers, and other sources; then I work the list one-by-one. I keep a notepad on my desk and when something catches my eye, I’ll write down the ticker and a one-liner noting the idea “theme” and what makes it interesting.

Here’s that idea list as of today:

Sourcing ideas scratchpad

As I work through the list, I’ll typically start with a “first pass filter” to see if an idea is worth adding to the more permanent watchlist for monitoring/review. This usually includes a quick scan of fundamentals and an attempt to identify the “theme” (spin, turnaround, merger, plain vanilla cheap stock, etc.).

Things I’m looking for during this scan — directional trends for sales, earnings, and cash flow, balance sheet condition, capital allocation policies, catalysts, chart & share price (less time-sensitive if a falling knife situation), management changes, and a few other situational markers.

At this level, my process for working the list is informal, usually starting with event-driven ideas that have hard catalysts (upcoming spins or reorgs), then plain vanilla cheap stocks, and “beaten down” ideas last since it’s chock-full of landmines and falling knives.

What are some “top of funnel” ideas on my list right now?

• Sangoma (STC.TO, $8) — small cap Canadian UCaaS provider with new-ish management cleaning things up… probably a takeout candidate

• DNOW Inc (DNOW, $15) — merger of equals with MRC (4Q25 close timeframe)… probably leads to better than expected earnings/FCF growth over next 2-4 years

• GCI Liberty (GLIBK, $33) — recent telecom spin-off with low leverage… FCF inflection a few years away with capex buildout continuing into 2026

• Unit Corp (UNTC, $28) — oil & gas upstream and rig services with plenty of cash and a big dividend… feels like a slow motion (unofficial) liquidation effort

• KBR Inc (KBR, $48) — down ~24% over the past year on a major contract loss; government contractor and a (potentially) super valuable licensing business

• Lendway (LDWY, $5) — formerly Insignia Systems, sold that business and deployed the cash into an LBO of a flower “manufacturing” and distribution business… early innings, but making progress

• Six Flags (FUN, $31) — recent “merger of equals” with Cedar Fair… still high leverage, but laid out path to big FCF generation next few years (also, these seem like decent businesses)

• A-Mark Precious Metals (AMRK, $21) — down 40% over the past year and from the point where FinTwit was in love (?) with the name… oh, and gold prices are +40% during that timeframe

• Bristow (VTOL, $33) — the ultimate coiled spring name? stock is basically flat from 2016-today with few big swings during that stretch… helicopter services to O&G, search & rescue, etc. (was a merger between ERA Group and bankrupt former Bristow)

• NCR Atleos (NATL, $30) — ATM hardware/software with a $2.2bn market cap… CEO outlined a path to $700m FCF over the next 6 quarters and consensus 2027 EPS is near $6… is this insanely cheap?

• Celanese (CE, $48) — still too early (IMO)… levered acquisition of DuPont business blew up… still work in progress

• Regis (RGS, $19) — supercuts franchisor (and now operator)… shares flatlining after mid-2024 refinancing (potential coiled spring)… I don’t love the business as much as FinTwit does, it’s still a crummy brand with store closures on the horizon

• Synchronoss (SNCR, $8) — software company with multi-year contracts just received a big tax refund to repay debt… super cheap, looks interesting… wish I understood the business a bit better (tweeted about it recently)

• Energizer (ENR, $28) — these consumer products companies are in tariff crosshairs and ENR has lots of debt, but good cash flows… feels early with impact uncertainty

• United Natural Foods (UNFI, $26) — just covered this one… not in love with the business (SuperValu anyone?), but the math checks out

• Ranger Energy (RNGR, $13) — zero knowledge, but a smart friend told me to check it out

• Organon (OGN, $10) — revisiting this generics manufacturer after dividend cut… still too much leverage

Of these names, maybe a handful will ultimately make it over to the watchlist…

2) The watchlist

After a first pass filter, I’ll either leave an idea alone (as in, not track it) or add it to my watchlist which looks something like this:

Watchlist tracker

It’s a semi-formal and semi-permanent tracker for stocks I’m following. Usually, an idea lands here when I like the combination of valuation, theme, and catalyst; but haven’t done enough work on the industry, peers, history, or how the idea stacks up against existing holdings.

My watchlist includes:

• Price, market cap, 52 week low, and % of 52 week low (previously tried tracking the “first price” at which I noticed the stock, but I haven’t been consistent with this)

• My interest level (low, watch, high, or holding) — it’s a low effort attempt to rank-sort the list… current breakdown is ~20 high interest, 60 on watch, and 15 low interest names

• Industry

• One-liner note on the idea (simply for recall purposes when I’m revisiting the list at a later date)

• Theme — This is my “pattern recognition” component (i.e. spin, merger, beaten down, turnaround, etc.). Here’s what it looks like in aggregate:

  

  Watchlist theme count

Right now, I have ~120 names on this tracker (including existing holdings & recommendations). Every few months or so, I’ll copy this list over to financial software (KoyFin, TIKR, BamSEC, etc.).

Using the watchlist is where things get murky…

• Research — Writing Quick Value articles is my method for consistently researching ideas on my sourcing list and watchlist. That effort usually results in a spreadsheet with helpful data/tables and a valuation exercise which I’ll add to the tracker.

• Price targets — I’m not consistent at updating price targets for current holdings (especially those with shorter investment horizons), but I like to frequently sort the list by upside/downside for a quick pulse on position sizing.

• Sentiment tracking — Tracking % 52 week low gives me a read on how many stocks are within 10% of their lows… right now, my list has 18% of names within 10% of lows (in early April it was closer to 40%)… take this with a grain of salt since I’m a bottom-feeding value investor

• Organizing thematic/industry bets — I don’t manage my portfolio from top down, but it’s helpful to see where ideas are typically coming from or if I have a ton of interest in a single industry.

• “Fresh sheet of paper” exercise — I don’t work this exercise often enough, but the concept is simple… imagine your portfolio is sitting entirely in cash right now, then (re)construct the portfolio from scratch… then compare how that differs from your current portfolio. Here’s an excerpt from a Lee Ainslie interview on the concept:

  

  Maverick Capital: fresh sheet of paper exercise

This may look organized, but it’s more of a fluid approach than a rigid process.

My time commitment to stocks and managing the portfolio ebbs and flows based on how busy things are with my private business holdings. I like the back-and-forth periods of withdrawal since it prevents me from “meddling” with my portfolio too much.

Leave a comment with: 1) feedback on the process and suggestions for improved usage; or 2) pieces of your sourcing / watchlist process.

Cheers,

Colin