Southwest Gas Holdings, Inc.

Where It Passes

Where It Falls Short

• Efficiency0% pass✓ 1✗ 10▾

  No clean pass — all 8 investors flag at least one efficiency criterion

  Current Ratio0.89

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)3.4%

  ✗Buffett> 10%

  ROIC - WACC-6.6%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)5.4%

  ✗Greenblatt> 25%

  Current Ratio Change YoY0.80 -> 1.28

  ✓PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.21x -> 0.19x

  ✗PiotroskiImproved YoY

  Current Assets / Current Liabilities0.89

  ✗Dreman> 1.5

  Return on Invested Capital5.2%

  ✗Munger> 15%

  ROIC (high and growing)FY2023: ROIC=2.9%; FY2024: ROIC=4.5%; FY2025: ROIC=5.0%

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

  Reinvestment Rate x ROIC2.0% (RR=39% x ROIC=5.2%)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest 5.0%)

  ✗SleepROIC > 12% in a majority of years
• Valuation8% pass✓ 4✗ 24▾

  12 of 13 flag SWX's valuation — Graham, Lynch, Greenblatt +9 more

  Net income / market capitalization+4.37%; #1883/6340 (top 29.7%)

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

  Price / 3-yr avg EPS25.6x

  ✗Graham<= 15x

  Price-to-Book Ratio1.7x

  ✗Graham<= 1.5x

  P/E x P/B43.80

  ✗Graham<= 22.5

  Basic earnings-growth PEG (dividends excluded)1.93

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value4.8%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=4.8%, ROC=5.4%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / EPS15.4x

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

  Price / (CFO / Shares)12.2x

  ✗Dreman< 8x

  Price / Book Value per Share1.7x

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

  Valuation ReasonablenessP/E=15.4x, OE Yield=-0.6%

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

  P/E or FCF YieldP/E=15.4x, FCF Yield=-3.7%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  P/B or P/E vs. Historical AverageP/E=15.4x, P/B=1.7x

  ✓MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value-70.8% (IV=$54.85 vs Price=$93.66)

  ✗Marks>= 20% below intrinsic value

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Price vs. Trailing Low130% of trailing low ($71.80)

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

  Positive book equity / market capitalization+0.6043; #2511/6449 (top 38.9%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS15.4x

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

  (EPS CAGR % + Dividend Yield %) / P/E0.69

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

  Price / Tangible Book Value per Share1.71x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change+17.3%

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

  Revenue / market capitalization+0.2858; #3385/5247 (top 64.5%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization-8.44%; #3170/4519 (top 70.1%)

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date+0.52%; #2639/6202 (top 42.6%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Valuation models10% pass✓ 1✗ 9▾

  Models split on SWX at $93.66 — fair values range $4.38–$101.01

  Graham fair value$86.59

  ✗Graham-8.2% margin vs $93.66

  Buffett fair value$76.22

  ✗Buffett-22.9% margin vs $93.66

  Lynch fair value$48.57

  ✗Lynch-92.8% margin vs $93.66

  Greenblatt fair value$42.75

  ✗Greenblatt-119.1% margin vs $93.66

  Dreman fair value$54.85

  ✗Dreman-70.8% margin vs $93.66

  Munger fair value$101.01

  ✓Munger+7.3% margin vs $93.66

  Pabrai fair value$4.38

  ✗Pabrai-2038.4% margin vs $93.66

  Akre fair value$71.91

  ✗Akre-30.2% margin vs $93.66

  Marks fair value$45.36

  ✗Marks-106.5% margin vs $93.66

  Templeton fair value$28.97

  ✗Templeton-223.3% margin vs $93.66
• Debt & Leverage17% pass✓ 3✗ 12▾

  10 of 12 flag SWX's debt & leverage — Graham, Buffett, Lynch +7 more

  Total Debt / Shareholders' Equity0.86

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

  LT Debt vs Net Current AssetsLT Debt $3.5B vs NCA $-85.3M

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 0.89, IC: 2.0x

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

  Total Debt / Equity0.86

  ✗Lynch< 0.33

  Cash - Long-term Debt$-3.4B

  ✗LynchPositive preferred

  LT Debt / Total Assets Change29.03% -> 32.92%

  ✗PiotroskiDecreased YoY

  Current Assets / Current Liabilities0.89

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

  Debt Levels0.86

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

  Interest Coverage & Debt/EBITDAIC=2.0x, D/EBITDA=4.4x

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

  Total Debt / Shareholders Equity0.86

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.8610; #3054/4210 (top 72.5%)

  ✗AsnessTop 30% of eligible cross-section
• Profitability19% pass✓ 13✗ 22▾

  13 of 16 flag SWX's profitability — Graham, Buffett, Lynch +10 more

  Net income / market capitalization+4.37%; #1883/6340 (top 29.7%)

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

  Positive EPS (10 years)10/12 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)19.9%

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)10/12 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)4.3%

  ✗Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)24.4% (latest)

  ✗BuffettStable or rising over 10 years

  Free Cash Flow Proxy$-37.3M

  ✗BuffettPositive and growing

  Earnings Variance (10-yr CoV)0.72

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

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

  Basic earnings-growth PEG (dividends excluded)1.93

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR8.0%

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

  ROE7.2%

  ✗Lynch> 15%

  EBIT / Enterprise Value4.8%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=4.8%, ROC=5.4%

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets4.22%

  ✓PiotroskiROA > 0

  ROA Change YoY1.65% -> 4.22% (delta: +2.57%)

  ✓PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=5.33%, ROA=4.22%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue17.1%

  ✓Dreman>= 8%

  Net Income / Shareholders' Equity7.2%

  ✗Dreman> 12%

  Margin of SafetyP/E=15.4x, P/B=1.7x

  ✗PabraiP/B < 1.5 or P/E < 15

  Return on Equity7.0% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value-70.8% (IV=$54.85 vs Price=$93.66)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency10/11 years positive

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

  Operating Income / Revenue24.4%

  ✓Ackman>= 15%

  Net Income / Shareholders Equity7.2%

  ✗Ackman>= 15%

  5-Year EPS CAGR8.0% CAGR over 5 years

  ✓Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend5.4% (2023) -> 24.4% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendrevenue flat/down, operating margin 5.4% -> 24.4%

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

  Gross profit / total assets

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+7.23%; #2201/5226 (top 42.1%)

  ✗AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0183; #1341/5884 (top 22.8%)

  ✓AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR8.0% over 5 years

  ✓Neff7%-20% annualized

  Positive Diluted-EPS Years9/10 years positive

  ✓Schloss>= 70% positive over 5-10 observed years (app rule)
• Cash Flow20% pass✓ 3✗ 9▾

  8 of 10 flag SWX's cash flow — Buffett, Lynch, Dreman +5 more

  Free Cash Flow Proxy$-37.3M

  ✗BuffettPositive and growing

  FCF Positive and Growing$-573.2M

  ✗LynchPositive and growing

  Operating Cash Flow$556.1M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=5.33%, ROA=4.22%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)12.2x

  ✗Dreman< 8x

  P/E or FCF YieldP/E=15.4x, FCF Yield=-3.7%

  ✗PabraiP/E < 15 or FCF Yield > 10%

  FCF Positive3/11 years FCF positive

  ✗MarksPositive FCF in majority of recent years

  (OCF - CapEx) / Market Cap-8.5%

  ✗Ackman>= 4%

  Price / FCF per ShareN/A (negative FCF)

  ✗Ackman<= 25

  Positive Operating Cash Flow frequency11/11 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures$-573.2M

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

  (Operating cash flow - capex) / market capitalization-8.44%; #3170/4519 (top 70.1%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Verdicts21% pass✓ 3✗ 11▾

  Split decision: 10 FAIL · 3 PASS · 3 NEUTRAL

  Overall verdict

  ✗GrahamFAIL (1/9)✗BuffettFAIL (0/9)✗LynchFAIL (2/7)✗GreenblattRank #1523✓PiotroskiPASS (F-Score 5)✗DremanFAIL (4/11)✓MungerPASS (2/4)✗PabraiFAIL (0/3)✗AkreFAIL (0/6)✗MarksFAIL (2/5)✓AckmanPASS (5/9)•TempletonNEUTRAL (5/8)✗SleepFAIL (1/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (2/6)•SchlossNEUTRAL (4/7)✗OshaughnessyFAIL (Rank #745/963 (Top 77.4%))
• Growth50% pass✓ 8✗ 5▾

  4 of 8 pass — Graham, Lynch, Ackman +1 more object

  EPS Growth (3-yr avg, 10-yr window)19.9%

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)1.93

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR8.0%

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

  Inventory Growth vs Revenue GrowthN/A (no inventory)

  ✓LynchInventory growth < Revenue growth

  EPS Growth Direction$2.92 (2015) -> $6.08 (2025)

  ✓DremanPositive over recent years

  EPS CAGR7.6% CAGR over 10 years

  ✓Dreman> 5% annualized

  Positive Net Income Frequency10/11 years positive

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

  3yr Median Revenue Growth-21.6%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency3/5 years with positive EPS growth

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

  5-Year EPS CAGR8.0% CAGR over 5 years

  ✓Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendrevenue flat/down, operating margin 5.4% -> 24.4%

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

  5-year Revenue CAGR-10.1%

  ✗SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR8.0% over 5 years

  ✓Neff7%-20% annualized