Some great businesses are being thrown out by the market.

A few weeks ago, I wrote about how everyone is making the same trade in the market today.

Whether you’re investing in hyperscalers, neoclouds, semiconductors, or energy stocks, it’s all about AI. The AI buildout is driving growth, margin expansion, and higher stock prices.

But I’ve been uncomfortable with the footing that trade is built on, given the debt even hyperscalers are taking out, rising interest rates, and lack of moats.

So, I’ve focused on what I think are more durable businesses with a strategic advantage trading at a reasonable price. And the deals today are looking better than they have in years.

More on that in a moment.

Overall, the market does continue a slight pullback from June highs, at least on the Nasdaq 100 side. There are ups and downs depending on the speculation about AI spending and payback, but the “everything goes up” phase of the AI cycle appears to be over.

The Asymmetric Portfolio has continued to hover just above the S&P 500’s performance long-term, pulling back in the past week after the CLARITY Act stalled in Congress.

As I’ll get to below, I’m using this opportunity to acquire stocks that I think are cheap with long-term growth tailwinds.

Themes are a big trend on the stock market today. Investors are chasing the story of the month and then moving on to the next story with little regard for whether a business is performing well or not.

We saw this with nuclear and quantum stocks last year, bottleneck stocks earlier this year, and now it’s picks and shovels that are “clear” winners of today.

Amid it all, we haven’t seen the kind of financial returns and disruption you would have guessed a few years ago when AI hit the scene. And I would argue some “disrupted” companies have come out stronger. But the market hasn’t seemed to notice, and there are some incredible values today.

Below are the biggest companies with a P/E under 20x, 3-year revenue CAGR of 10% or more, positive net income, and a stock that’s down over 10% YTD. In other words, a screen of cheap compounders. It’s a who’s who of Asymmetric Investing stocks…

BTW, I did pull out most bank and financial services industries because they typically have lower multiples.

What you might notice just looking at the P/E ratios and the 3-year growth rate is that there are some great opportunities on the market today. Not every stock will be a winner, but this is a great place to start looking for asymmetric opportunities long-term.

Remember, stock market performance will be driven by three things:

Each of these companies has revenue growth at its back and the opportunity for multiple expansion.

What the market is questioning is whether revenue growth is sustainable and the future of margins. These are the “disruption is surely coming for them…right?” stocks. And if disruption isn’t coming, this is a buying opportunity.

Amid all of the noise, I think we’re seeing some great opportunities in the market in companies we will look back on as “obvious” a year or two from now. And that’s where I’ll be buying stocks over the next few months.