The Validea Warren Buffett model, inspired by Mary Buffett’s “Buffettology,” embodies Warren Buffett’s systematic investment approach focused on long-term value. This strategy targets companies showing consistent excellence through robust earnings, sound financial practices, and superior shareholder returns.
The model selects businesses with proven performance across several criteria. Companies must show predictable earnings growth over ten consecutive years without any negative periods. They need to maintain strong returns on equity, with a ten-year average of at least 15% and no single year falling below 10%.
For non-financial sector companies, the strategy requires a minimum ten-year average return on total capital of 12%. Financial stability is confirmed through positive free cash flow, ensuring the business generates more cash than it uses. Management effectiveness is evaluated by their ability to produce at least a 12% return on retained earnings, demonstrating wise use of shareholders’ capital.
The model emphasizes prudent debt management, restricting long-term debt to no more than five times annual earnings to ensure financial flexibility. After a company satisfies these rigorous requirements, the final consideration is market valuation, waiting for favorable entry points that promise enduring value. This disciplined methodology reflects Buffett’s renowned patience and quality focus, emphasizing established companies with proven histories rather than pursuing quick profits or following market fads.
Discover how Validea’s Warren Buffett-inspired ‘Patient Investor’ strategy can help you identify high-quality, long-term investments even in changing market conditions. Visit Validea.com to access in-depth stock analysis and tools designed to emulate Buffett’s proven investment principles. Start investing like the Oracle of Omaha today!
Here are the top ten highest scoring stocks according to Validea’s Buffett model for March of 2025.
| Ticker | Company Name | Patient Investor | Price | Market Cap ($mil) | PE Ratio | Price/ Sales | Relative Strength | Price/ Book | Quality Percentile | Return on Equity | Return on Capital |
|---|---|---|---|---|---|---|---|---|---|---|---|
| AMAT | APPLIED MATERIALS INC | 100 | $158.07 | $128,422 | 20.7 | 4.7 | 39 | 6.9 | 5 | 35.2% | 37.8% |
| AX | AXOS FINANCIAL INC | 100 | $66.80 | $3,814 | 9.0 | 3.1 | 78 | 1.5 | 9 | 18.8% | 1,339.0% |
| FIX | COMFORT SYSTEMS USA, INC. | 100 | $363.33 | $12,917 | 24.9 | 1.8 | 72 | 7.6 | 16 | 35.0% | 91.2% |
| GWW | WW GRAINGER INC | 100 | $1,021.21 | $49,239 | 26.2 | 2.9 | 63 | 14.7 | 4 | 59.0% | 44.8% |
| ITW | ILLINOIS TOOL WORKS INC | 100 | $263.98 | $77,478 | 22.5 | 4.9 | 59 | 23.4 | 2 | 110.2% | 77.0% |
| KNSL | KINSALE CAPITAL GROUP INC | 100 | $431.85 | $10,052 | 24.3 | 6.5 | 42 | 6.8 | 8 | 32.3% | 10.7% |
| LRCX | LAM RESEARCH CORP | 100 | $76.74 | $98,508 | 23.3 | 6.1 | 41 | 11.2 | 7 | 50.4% | 37.5% |
| NVR | NVR INC | 100 | $7,245.58 | $21,668 | 14.3 | 2.0 | 50 | 5.2 | 8 | 39.2% | 457.5% |
| PAYC | PAYCOM SOFTWARE INC | 100 | $219.47 | $12,287 | 24.7 | 6.5 | 74 | 7.8 | 1 | 34.9% | 34.2% |
| NEU | NEWMARKET CORP | 96 | $570.11 | $5,430 | 11.8 | 2.0 | 46 | 3.7 | 7 | 36.3% | 29.4% |
| ALLE | ALLEGION PLC | 96 | $128.71 | $11,106 | 18.9 | 2.9 | 59 | 7.4 | 4 | 42.4% | 46.2% |
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