Title: $100,000 Annual Cash Flow (Portfolio Update) — Portfolio Update July 2026 Show: Compounding Quality (Substack, paid post — compoundingquality.net) Guest: Pieter Slegers / Team Compounding Quality (author) Date: 2026-08-02 URL: https://www.compoundingquality.net/p/portfolio-update-ba4 Length: written post — no timestamps Note: Paid-subscriber post captured via Stephen's logged-in session. Body text verbatim; UI chrome removed. Fiscal.ai chart panels noted inline as [Image — …]. The portfolio's Fair Value, Owner's Earnings and full Valuation tables are published as images and are transcribed below as [Table image — …] blocks; figures are read directly from those images. The post's on-page subtitle is "Portfolio Update July 2026" although it was published on 2 August 2026.
Investing is the easiest way to build wealth.
Our Portfolio is making almost $100.000 (!) in Free Cash Flow per year for us.
And this while we don't have to work for it.
As Warren Buffett said:
[Image — Warren Buffett quote card]
Here's what Our Portfolio makes for us:
$96.156 per year
$8,018 per month
$1,841 per week
$263.63 per day
$10.98 per hour
$0.18 per minute
[Image — evolution of the portfolio's look-through Free Cash Flow]
Let's dive into Our Portfolio Update today.
Berkshire Hathaway
Berkshire Hathaway is the best investment holding in the world.
Here's their track record compared to the S&P 500:
[Image — Berkshire vs S&P 500 long-run track record. Source: Fiscal.ai]
If you do the same thing as everyone else you'll get the same results as everyone else.
What this means?
Every active investment strategy faces periods of out- and underperformance.
Just look at how Berkshire performed in 1999:
Berkshire Hathaway: -18.9%
S&P 500: +23.0%
[Image — 1999. Source: Fiscal.ai]
Something similar can be seen over the past year:
Berkshire Hathaway: +3.5%
S&P 500: +19.5%
[Image — past year. Source: Fiscal.ai]
The good news?
Periods of underperformance are always followed by periods of outperformance.
Especially for amazing investors like Warren Buffett.
Like it did from 2000 to 2003:
Berkshire Hathaway: +53.7%
S&P 500: -19.2%
[Image — 2000-2003. Source: Fiscal.ai]
I think we could see something similar in the years to come.
There is more and more evidence that the reversal is starting.
Over the past few months, the S&P 500 has been relatively flat:
[Image — S&P 500 recent months. Source: Fiscal.ai]
But some of the sectors that have done very well are starting to suffer.
While the S&P 500 was flat, the iShares Semiconductor ETF declined by 20% in mid July:
[Image — iShares Semiconductor ETF. Source: Fiscal.ai]
The next chart shows the expected market volatility in two different ways:
VIX (dark blue): Measures the expected volatility of the overall S&P 500 index.
VIXEQ (light blue): Measures the average expected volatility of the individual companies in the S&P 500. In other words, it shows the expected price swings of the average stock in the index.
[Image — VIX vs VIXEQ. Source: Mike Zaccardi on X]
Right now, the gap between the two is much wider than usual.
Why?
Individual stocks are making large moves based on company-specific news, such as earnings reports and AI developments.
But many of these stocks are moving in opposite directions, so their gains and losses largely offset each other at the index level.
This could be a sign that the AI and semiconductor trade is cooling off.
In the meantime, investors rotate into other parts of the market.
Quality stocks have held up particularly well over the past month (orange line):
[Image — quality factor last month. Source: Fiscal.ai]
Our Portfolio
As you could already see in the chart with the Free Cash Flow, Our Companies are becoming stronger and stronger.
Year after year.
Another way to look at this?
Owners Earnings.
Owners earnings = Growth in Earnings Per Share + Dividend Yield
The evolution looks as follows:
[Image — evolution of portfolio owner's earnings]
The fundamentals of Our Portfolio also looks way healthier than the S&P 500:
[Image — portfolio fundamentals vs S&P 500]
Our Portfolio is also cheaper than ever.
[Table image — "FCF Yield" of Our Portfolio by year: 2015 4.2%; 2016 4.4%; 2017 4.5%; 2018 5.1%; 2019 4.2%; 2020 3.4%; 2021 3.3%; 2022 4.4%; 2023 4.1%; 2024 4.7%; 2025 5.6%; Right now 5.8%]
Sometimes, it takes Mr. Market time to recognize a company's true value.
Just look at this table from François Rochon:
[Image — owner's earnings vs stock prices, 2005-2014. Source: Giverny Capital]
Between 2005 and 2011:
Owner's earnings: +10% per year
Stock prices: +6% per year.
Between 2012 and 2014:
Owner's earnings: +16% per year
Stock prices: +28% per year
But over the long run (2005–2014), Owner Earnings and stock prices both compounded at 12% per year.
The lesson?
In the short term, stock prices are driven by valuation changes.
In the long term, they follow owner earnings.
You can think about this like a rubber band.
The further away the stock price stretches from the underlying business fundamentals, the harder it usually snaps back.
My friend Brian Feroldi has a great graphic to reminds us that what matters in the long run is the business.
[Image — Brian Feroldi on X]
Let's now dive into Our Portfolio and give an update.
Spreadsheet
As a reminder, you have always access to Our Portfolio here: Our Portfolio
Here's the split over the three categories:
Owner-Operators (66.6%): Still led by the founder/family
Monopolies/Oligopolies (26.9%): Only a few companies dominate an entire industry
Cannibal Stocks (6.5%): Companies that are heavily buying back shares
[Table image — "% of Portfolio" pie: Owner-Operator 66.6%; Monopolies/Oligopolies 26.9%; Cannibal Stocks 6.5%]
Fair Value
Here's the Fair Value (Buy-Below Price) for every company in Our Portfolio.
The Fair Value is the price at which the expected yearly return equals 10% in our Earnings Growth Model.
I consider the company undervalued when the stock price is lower than its Fair Value:
[Table image — Fair Value table (Date first bought / Company / Current stock price / Fair value / Over-Undervaluation): 10/23/2023 Medpace $526.6 / $439.4 / -16.6% 10/29/2023 Evolution AB $73.9 / $97.1 / 31.4% 11/13/2023 Kelly Partners Group $2.6 / $5.3 / 103.5% 11/27/2023 Brown & Brown $67.1 / $90.5 / 34.8% 1/15/2024 LVMH $549.0 / $859.0 / 56.5% 2/19/2024 Games Workshop $277.5 / $167.7 / -39.6% 3/11/2024 Dino Polska $3.9 / $6.4 / 62.6% 4/30/2024 Kinsale Capital $340.0 / $416.8 / 22.6% 7/1/2024 Interparfums $122.3 / $151.8 / 24.2% 8/12/2024 Ameriprise Financial $524.4 / $563.2 / 7.4% 10/21/2024 Visa $357.4 / $614.0 / 71.8% 12/23/2024 Topicus $65.4 / $133.5 / 104.2% 3/31/2025 HgCapital Trust $5.1 / $7.1 / 39.8% 5/26/2025 Novo Nordisk $49.5 / $97.1 / 96.2% 11/10/2025 Constellation Software $1,909.4 / $4,565.5 / 139.1% 12/23/2025 Brookfield $42.3 / $69.0 / 63.0% 2/3/2026 Zoetis $75.5 / $123.8 / 64.0% 5/18/2026 3i Group plc $33.5 / $50.8 / 51.6% 6/23/2026 KKR $97.4 / $119.9 / 23.2%]
Constellation Software and Topicus have the most upside potential based on our calculations.
We explain how you can calculate the fair value of a company in this article.
Owner's Earnings
In the long term, stock prices always follow the evolution of a company's Owner's Earnings.
The evolution of the Owner's Earnings for every company looks as follows:
[Table image — Owner's Earnings table (Company / EPS 2025 / EPS 2028 / Dividend Yield / Total EPS Growth / Yearly EPS Growth / Expected yearly return next 3 years): Medpace 15.28 / 20.81 / 0.00% / 36.19% / 10.84% / 10.84% Evolution AB 5.24 / 6.71 / 0.00% / 28.05% / 8.59% / 8.59% Kelly Partners Group 9 / 20 / 0.00% / 122.22% / 30.50% / 30.50% Brown & Brown 4.26 / 5.23 / 0.96% / 22.77% / 7.08% / 8.04% LVMH 21.85 / 27.67 / 2.90% / 26.64% / 8.19% / 11.09% Games Workshop 594.9 / 666.93 / 2.80% / 12.11% / 3.88% / 6.68% Dino Polska 1.59 / 2.31 / 0.00% / 45.28% / 13.26% / 13.26% Kinsale Capital 19.51 / 23.24 / 0.20% / 19.12% / 6.00% / 6.20% Interparfums 5.24 / 6.49 / 2.60% / 23.85% / 7.39% / 9.99% Ameriprise Financial 39.29 / 55.39 / 1.20% / 40.98% / 12.13% / 13.33% Visa 11.47 / 16.85 / 0.70% / 46.90% / 13.68% / 14.38% Topicus 3.43 / 5.49 / 0.00% / 60.16% / 17.00% / 17.00% HgCapital Trust 0.28 / 0.39 / 1.30% / 40.49% / 12.00% / 13.30% Novo Nordisk 23.03 / 22.98 / 3.50% / -0.22% / -0.07% / 3.43% Constellation Software 79.8 / 121.37 / 0.20% / 52.09% / 15.00% / 15.20% Brookfield 2.6 / 3.95 / 0.80% / 52.09% / 15.00% / 15.80% Zoetis 6.41 / 7.91 / 2.70% / 23.40% / 7.26% / 9.96% 3i Group plc 1.63 / 2.48 / 3.10% / 52.09% / 15.00% / 18.10% KKR 6.11 / 9.29 / 0.80% / 52.09% / 15.00% / 15.80% PORTFOLIO TOTAL — expected yearly return next 3 years: 12.71%]
An expected growth of 12.7% looks attractive.
This is the result we could expect as an investor.
And as Our Portfolio trades at its cheapest valuation level ever, you could even expect a higher return than 12.7%.
Valuation Portfolio
The valuation of every company in Our Portfolio looks like this:
(Click on the picture to expand)
[Table image — full Valuation table. Columns: Company / Advice / [Earnings Growth Model:] EPS Growth, Dividend Yield, FWD PE, Fair exit PE, Expected Return, Fair value, Stock price, Over/Undervaluation / [Forward PE:] Current Forward PE, Average Forward PE past 5 years, Over/Undervaluation / [Reverse DCF:] Required growth reverse DCF, Expected growth, Difference / YTD / 5 Year CAGR / 10 Year CAGR Ameriprise Financial, Inc. — BUY — 9.8% / 1.4% / 11.0 / 11.7 / 11.8% / 591.3 / 489.2 / 17.3% — 11.0 / 11.7 / 6.0% — 1.1% / 9.8% / 8.7% — YTD -0.9% / 16.4% / 18.9% Brookfield Corporation — BUY — 12.0% / 0.6% / 46.0 / 68.0 / 17.4% / 122.6 / 61.4 / 49.9% — 46.0 / 45.0 / -2.2% — 5.4% / 12.0% / 6.6% — YTD -4.2% / 13.5% / 12.3% Brown & Brown, Inc. — BUY — 10.2% / 0.9% / 14.6 / 20.0 / 14.8% / 107.7 / 70.0 / 35.0% — 14.6 / 24.7 / 40.9% — 4.1% / 10.2% / 6.1% — YTD -9.8% / 6.2% / 14.3% Constellation Software Inc. — BUY — 15.0% / 0.2% / 15.8 / 20.0 / 17.9% / 7329.5 / 2779.4 / 62.1% — 15.8 / 31.5 / 49.8% — 7.5% / 15.0% / 7.5% — YTD -14.2% / 8.5% / 18.5% Dino Polska S.A. — BUY — 15.0% / 0.0% / 17.7 / 20.0 / 16.3% / 64.8 / 28.7 / 55.8% — 17.7 / 24.9 / 28.9% — 10.6% / 15.0% / 4.4% — YTD -30.0% / 0.1% / 24.7% Evolution AB (publ) — BUY — 5.7% / 5.0% / 11.0 / 15.0 / 13.5% / 993.8 / 677.8 / 31.8% — 11.0 / 15.0 / 26.7% — -3.0% / 5.7% / 8.7% — YTD 8.6% / -12.2% / 29.4% Interparfums, Inc. — BUY — 10.0% / 2.7% / 18.6 / 20.0 / 13.5% / 175.8 / 119.3 / 32.1% — 18.6 / 26.3 / 29.3% — 3.0% / 10.0% / 7.0% — YTD 39.7% / 13.6% / 15.6% Kelly Partners Group Holdings Limited — BUY — 12.0% / 0.0% / 18.1 / 25.0 / 15.8% / 7.0 / 4.0 / 42.1% — 18.1 / 29.3 / 38.2% — 7.5% / 12.0% / 4.5% — YTD -55.1% / 3.9% / 11.9% Kinsale Capital Group, Inc. — BUY — 11.0% / 0.3% / 17.2 / 20.0 / 12.9% / 474.5 / 355.0 / 25.2% — 17.2 / 28.6 / 39.9% — 4.1% / 11.0% / 6.9% — YTD -9.5% / 15.6% / 34.7% KKR & Co. Inc. — BUY — 9.8% / 0.8% / 16.2 / 17.9 / 11.6% / 109.9 / 94.0 / 14.5% — 16.2 / 17.9 / 9.5% — 0.9% / 9.8% / 8.9% — YTD -27.1% / 10.4% / 22.8% Medpace Holdings, Inc. — BUY — 12.0% / 0.0% / 29.7 / 25.0 / 10.4% / 586.7 / 557.6 / 5.0% — 29.7 / 29.4 / -1.0% — 7.4% / 12.0% / 4.6% — YTD -2.4% / 25.3% / 35.3% Novo Nordisk A/S — BUY — 8.6% / 3.5% / 12.3 / 20.0 / 18.4% / 683.3 / 332.0 / 51.4% — 12.3 / 27.8 / 55.8% — 7.5% / 8.6% / 1.1% — YTD 0.5% / 6.9% / 6.1% Topicus.com Inc. — BUY — 15.0% / 0.0% / 25.6 / 25.0 / 14.8% / 180.1 / 92.2 / 48.8% — 25.6 / 49.2 / 48.0% — 8.3% / 15.0% / 6.7% — YTD -26.3% / 12.7% / 7.2% Visa Inc. — BUY — 13.5% / 0.7% / 23.4 / 25.0 / 14.8% / 666.1 / 361.6 / 45.7% — 23.4 / 28.3 / 17.3% — 7.5% / 13.5% / 6.0% — YTD 4.4% / 9.4% / 17.1% Zoetis Inc. — BUY — 7.0% / 2.8% / 16.2 / 25.0 / 15.2% / 112.5 / 74.7 / 33.6% — 16.2 / 31.7 / 48.9% — 4.1% / 7.0% / 2.9% — YTD -40.7% / -16.5% / 4.6% 3i Group plc — BUY — 11.0% / 3.3% / 25.7 / 30.0 / 16.0% / 53.0 / 25.9 / 51.3% — 25.7 / 30.2 / 14.9% — 8.8% / 11.0% / 2.2% — YTD -19.5% / 19.8% / 16.5% Games Workshop Group PLC — HOLD — 7.0% / 2.3% / 33.1 / 23.0 / 6.3% / 139.5 / 214.8 / -54.0% — 33.1 / 23.0 / -43.9% — 10.9% / 7.0% / -3.9% — YTD 16.5% / 17.4% / 46.9% LVMH Moët Hennessy - Louis Vuitton, Société Européenne — HOLD — 9.6% / 2.6% / 19.9 / 24.9 / 14.7% / 798.8 / 498.0 / 37.7% — 19.9 / 24.9 / 20.1% — 6.2% / 9.6% / 3.4% — YTD -22.4% / -3.7% / 13.8% (HgCapital Trust does not appear in this valuation table.)]
Key happenings
7 July 2026: Dino Polska opened 148 in the first half of this year so far.
13 July 2026: Topicus acquired DiffusionData, a United Kingdom-based provider of real-time data streaming for mobile, web, and AI applications.
15 July 2026: Evolution AB published results that were worse than we hoped. On a constant currency basis, Evolution still grew 2.4% in Q2 (but that's half the growth in Q1). Joakim Andersson (CFO) of $EVO confirmed that they are fully utilizing its buyback program, purchasing up to 25% of daily trading volume.
At the current stock price, buying back shares for 2 million EUR equals 16% of all outstanding shares. Investors are currently sitting on a shareholder yield of 8-10% per year. The week of 20 July, Evolution bought back 1 million (!) shares
[Image — Evolution buyback disclosure]
16 July 2026: Novo Nordisk now has Oral Wegovy and the higher dose Wegovy injection approved throughout the EU. The company plans to launch the pill in more and more countries throughout 2026
Constellation Software continues to acquire businesses: "We estimate that $CSU deployed $646m on acquisitions in Q2. Since Q2, Constellation has deployed another $270- $347m on acquisitions. With $1.63B YTD, we estimate $3.12b capital deployed in FY26, above the record $2.46b deployed in FY23." - RBC
Upcoming Events
5 August 2026: results Topicus and Novo Nordisk
6 August 2026: results Zoetis and Kelly Partners Group
10 August 2026: results HG Capital Trust
12 August 2026: results Constellation Software and Brookfield
20 August 2026: results Dino Polska
See you next Tuesday!
Everything in life compounds Team Compounding Quality
Book: Order your copy of The Art of Quality Investing here
Used sources: Interactive Brokers (portfolio data and executing all transactions); Fiscal.ai (financial data)