A charge at the end of the window

Cognizant's operating profit rose 17% in its last fiscal year and its shares sit 30% below their January high. It is the second cheapest of the 104 companies that clear our two gates — and our own screen blocks it, on a net-income line that a single non-cash tax charge turned from up 14% to down 3%. Last week a one-off charge at the start of the window overstated a company's growth; this week one at the end erases it. This piece is about publishing against our own filter, and saying so.

September 20 · 11 min read

Four flat years, and twenty-six percent on capital

A. O. Smith has sold the same $3.8bn of water heaters for four years, earned the same $730m or so of operating profit on them, turned all of its net income into cash and retired a tenth of its shares. The market has marked it down 28% in a year. This piece is about a business that has stopped growing being priced as if it will shrink — and about a number in our own output that would have overstated it.

September 12 · 11 min read