MIDDLEBY Corp

Where It Passes

Where It Falls Short

• Debt & Leverage8% pass✓ 3✗ 12▾

  11 of 12 flag MIDD's debt & leverage — Graham, Buffett, Lynch +8 more

  LT Debt vs Net Current AssetsLT Debt $1.7B vs NCA $562.0M

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.78, IC: 5.5x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity1.31

  ✗Lynch< 0.33

  Cash - Long-term Debt$-1.6B

  ✗LynchPositive preferred

  LT Debt / Total Assets Change32.28% -> 33.71%

  ✗PiotroskiDecreased YoY

  Current Assets / Current Liabilities2.00

  ✓Dreman> 1.5✓SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity1.31

  ✗Dreman< 0.8✗Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✗SchlossD/E < 1.00x

  Debt Levels1.31

  ✗MungerDebt/Equity < 0.5✗AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=5.5x, D/EBITDA=3.2x

  ✓MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity1.31

  ✗Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-1.3138; #3497/4210 (top 83.1%)

  ✗AsnessTop 30% of eligible cross-section
• Profitability13% pass✓ 9✗ 26▾

  14 of 16 flag MIDD's profitability — Graham, Buffett, Lynch +11 more

  Positive EPS (10 years)24/31 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)29/31 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)9.9%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)18.0% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-243.2M

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE3.0%

  ✗Lynch> 15%

  EBIT / Enterprise Value15.6%

  ✓Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=15.6%, ROC=159.3%

  ✓GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets-4.40%

  ✗PiotroskiROA > 0

  ROA Change YoY5.88% -> -4.40% (delta: -10.28%)

  ✗PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=9.98%, ROA=-4.40%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY39.7% -> 39.1%

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue34.7%

  ✓Dreman>= 8%

  Net Income / Shareholders' Equity3.0%

  ✗Dreman> 12%

  Margin of SafetyP/B=2.4x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity4.7% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value-170.6% (IV=$49.95 vs Price=$135.16)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency29/30 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue37.5%

  ✓Ackman>= 15%

  Net Income / Shareholders Equity3.0%

  ✗Ackman>= 15%

  5-Year EPS CAGR20.4% CAGR over 4 years

  ✓Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend20.1% (2023) -> 18.0% (2025)

  ✗TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendgross margin 39.6% -> 39.1%, operating margin 20.1% -> 18.0%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization+0.66%; #3053/6340 (top 48.2%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets+31.65%; #1340/3702 (top 36.2%)

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+3.01%; #2674/5226 (top 51.2%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0438; #2403/5884 (top 40.8%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR4.5% over 5 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years9/10 years positive

  ✓Schloss>= 70% positive over 5-10 observed years (app rule)
• Valuation15% pass✓ 4✗ 24▾

  11 of 13 flag MIDD's valuation — Graham, Lynch, Dreman +8 more

  Price / 3-yr avg EPS40.6x

  ✗Graham<= 15x

  Price-to-Book Ratio2.4x

  ✗Graham<= 1.5x

  P/E x P/B96.70

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value15.6%

  ✓Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=15.6%, ROC=159.3%

  ✓GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS

  ✗Dreman< 12x✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price / (CFO / Shares)10.5x

  ✗Dreman< 8x

  Price / Book Value per Share2.4x

  ✗Dreman< 1.2x✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Valuation ReasonablenessOE Yield=-3.7%

  ✗MungerP/E < 25 or Owner Earnings Yield > 5%

  P/E or FCF YieldFCF Yield=9.2%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/B=2.4x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value-170.6% (IV=$49.95 vs Price=$135.16)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per Share11.8x

  ✓Ackman<= 25

  Price vs. Trailing Low142% of trailing low ($95.09)

  ✗Templeton<= 120% of trailing low (certified split-adjusted live window)

  Net income / market capitalization+0.66%; #3053/6340 (top 48.2%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.2178; #4105/6449 (top 63.7%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per ShareN/A (non-positive TBVPS)

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change+59.7%

  ✓SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.5292; #2557/5247 (top 48.7%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization+9.15%; #850/4519 (top 18.8%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date+17.46%; #1481/6202 (top 23.9%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Growth25% pass✓ 3✗ 10▾

  6 of 8 flag MIDD's growth — Graham, Lynch, Dreman +3 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthInv: -43.2% vs Rev: -16.6%

  ✓LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency29/30 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth-2.8%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency2/5 years with positive EPS growth

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR20.4% CAGR over 4 years

  ✓Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendgross margin 39.6% -> 39.1%, operating margin 20.1% -> 18.0%

  ✗SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR5.0%

  ✗SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR4.5% over 5 years

  ✗Neff7%-20% annualized
• Verdicts31% pass✓ 5✗ 11▾

  Split decision: 11 FAIL · 4 PASS · 1 NEUTRAL

  Overall verdict

  ✗GrahamFAIL (2/9)✗BuffettFAIL (1/9)✗LynchFAIL (1/7)✓GreenblattRank #42✓PiotroskiPASS (F-Score 4)✗DremanFAIL (3/11)✓MungerPASS (2/4)✗PabraiFAIL (0/3)✗AkreFAIL (1/6)✗MarksFAIL (3/5)✓AckmanPASS (5/9)✗TempletonFAIL (2/8)✓SleepPASS (3/6)✗AsnessFAIL (Rank #1480/2370 (Top 62.4%))✗NeffFAIL (2/6)✗SchlossFAIL (3/7)•OshaughnessyNEUTRAL (Not ranked)
• Valuation models33% pass✓ 2✗ 4▾

  Models split on MIDD at $135.16 — fair values range $37.86–$302.60

  Greenblatt fair value$100.12

  ✗Greenblatt-35.0% margin vs $135.16

  Munger fair value$128.49

  ✗Munger-5.2% margin vs $135.16

  Akre fair value$302.60

  ✓Akre+55.3% margin vs $135.16

  Marks fair value$63.44

  ✗Marks-113.1% margin vs $135.16

  Ackman fair value$140.13

  ✓Ackman+3.5% margin vs $135.16

  Templeton fair value$37.86

  ✗Templeton-257.0% margin vs $135.16
• Cash Flow50% pass✓ 7✗ 5▾

  5 of 10 pass — Buffett, Lynch, Dreman +2 more object

  Free Cash Flow Proxy$-243.2M

  ✗BuffettPositive and growing

  FCF Positive and Growing$559.5M

  ✗LynchPositive and growing

  Operating Cash Flow$630.2M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=9.98%, ROA=-4.40%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)10.5x

  ✗Dreman< 8x

  P/E or FCF YieldFCF Yield=9.2%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive18/18 years FCF positive

  ✓MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap8.5%

  ✓Ackman>= 4%

  Price / FCF per Share11.8x

  ✓Ackman<= 25

  Positive Operating Cash Flow frequency29/29 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$559.5M

  ✓Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization+9.15%; #850/4519 (top 18.8%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Efficiency50% pass✓ 5✗ 6▾

  4 of 8 pass — Buffett, Piotroski, Akre +1 more object

  Current Ratio2.00

  ✓Graham>= 2.0

  ROIC (3-5 yr avg)9.7%

  ✗Buffett> 10%

  ROIC - WACC-0.3%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)159.3%

  ✓Greenblatt> 25%

  Current Ratio Change YoY2.81 -> 2.57

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.43x -> 0.51x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities2.00

  ✓Dreman> 1.5

  Return on Invested Capital31.1%

  ✓Munger> 15%

  ROIC (high and growing)FY2023: ROIC=9.1%; FY2024: ROIC=8.4%; FY2025: ROIC=9.2%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROICN/A (non-positive net income)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest 9.2%)

  ✗SleepROIC > 12% in a majority of years