Enterprising Investor Forum

S&P Value Screen Friday, March 28, 2008

We decided to use the MSN Deluxe Screener to see what kind of value we could find in the S&P at this present time. Our main focus was to try and find a company that was outperforming the industry average in a very efficient manner. And especially, one that was doing so through solid fundamentals.

Our screen consisted of:

• Current P/E Ratio < Industry Average
• EPS Growth Yr vs Yr > S&P Average
• Debt to Equity Ratio < Industry Average
• Net Profit Margin > Industry Average
• Return on Equity > Industry Average
• Income per Employee > Industry Average
• Current Ratio > Industry Average
• MSN Rating > 9

Out of the five companies that passed this screen, Coach Inc. (COH), was that one that most caught our attention. The others were: ENSCO International (ESV), Haliburton (HAL), Illinois Tool Works (ITW) and Manitowoc (MTW).

Apart from the strength shown by passing the above mentioned screen (we love their margins!), we really like how the management has manged to reposition the brand. Not only have they done so in the US but despite some skepticism, the brand seems to be catching on abroad, especially in Japan.

We definitely think that the company is worth a closer look and that they are well positioned for future growth.

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