My current 10 stocks where I think the market is mispricing quality

I update a ranking every month of companies where I think the market is too pessimistic relative to the quality of the business.

Not necessarily the cheapest stocks. Usually there is a real reason the stock is disliked, and I’m trying to judge whether that risk is already more than priced in.

August:

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

A few that stand out:

Intuit is still #1. Growth isn’t amazing, but FY27 guidance has revenue +9–10% while GAAP EPS is expected +22–24%. Around 15x forward earnings. The main thing I’m watching is customer growth and whether AI actually weakens the tax/accounting workflow.

Adobe at #3 is probably the one people will disagree with most. AI is clearly a threat, but at roughly 11x forward earnings I think the market is already pricing in pretty serious moat erosion. The question is whether Adobe keeps the professional workflow and monetisation layer even as creation gets easier.

Meta went from #8 to #4. The stock didn’t suddenly become much cheaper, the operating case just got stronger. Revenue +28%, impressions +14%, price/ad +12%. The obvious counterweight is the enormous AI capex.

Nvidia entered at #7. This isn’t because I think the current growth rate lasts. It’s because after the latest results the valuation looks surprisingly low relative to even fairly conservative earnings assumptions. I still penalise it heavily for cycle risk, customer concentration, financing exposure and weaker cash conversion.

Tencent fell from #4 to #9 despite good operating results. Advertising and games were strong, but compute spending jumped and reported FCF took a big hit. Good example of why I don’t rank purely on earnings growth or P/E.

Microsoft is #10 mainly because I see less valuation upside versus the names above it, not because I think it’s a worse company.

This isn’t meant to be a diversified portfolio. It’s just my ranking of current 3–5 year risk/reward versus the S&P 500.

I also keep long-term business quality separate from current valuation, so something like Microsoft can rank much higher on 30-year quality while ranking lower here.

Which placement looks most wrong?