Quality stocks: what price on the market in July 2026

2026-07-03 · By Lubin Danilo, founder of Lubin Investment

A stock's price moves every day, and the cash it generates gets a fresh number every quarter. That means valuation is constantly being recalculated. Here is the snapshot, from early July 2026, of what the market is currently paying for the top rated companies in my ranking, and how to read it over time.

The essentials

• A stock's price moves every day on the market, but the cash it produces (free cash flow) only gets updated after each quarterly earnings report.
• A valuation ratio (the P/FCF, price divided by that cash) frozen at one moment goes stale fast: it mixes a numerator that moves constantly with a denominator that jumps in steps.
• Among the 74 stocks currently rated at the top of my quality scale, prices range from under 3 times the cash they generate to over 85 times, with most sitting between 15 and 30 times.
• A low price means nothing by itself: it only becomes interesting because quality was already checked separately, upfront.
• Paychex just closed its fiscal year in late June 2026, a concrete example of a quarter that refreshes the calculation.

Why a good stock's valuation never stays the same for long

On July 3, 2026, I open my site's dashboard and for every stock rated at the top of my quality scale, I see a number that has already changed since yesterday: the P/FCF, the share price divided by the free cash flow the company generated over the trailing twelve months. Free cash flow is the cash that actually stays in the company's bank account once salaries, taxes and reinvestment are paid. A P/FCF of 10 means you are paying, today, for ten years of that cash to own the stock.

That number moves for two completely different reasons, and that is the trap almost nobody sees. The first is the share price, which changes every second the market is open, driven by sentiment, interest rates, sector rotations. The second is free cash flow itself, which does not move continuously: it jumps in steps, at each new quarterly earnings release, when a fresh quarter replaces a year old one in the trailing twelve month calculation.

A valuation is therefore never a fixed truth carved in stone. It is a snapshot, taken at one exact moment, with two dials moving at different speeds. Presenting it as a fixed number would be misleading. The right habit is knowing when to re-check it: right after each earnings release, and whenever the share price has moved sharply.

The snapshot from July 3, 2026, across my top rated stocks

Before the numbers, a word on what a top score means to me. I judge a company's quality on ten concrete financial criteria, independently of its price: profitability, sales and cash growth, its ability to buy back its own shares rather than issue new ones, how manageable its debt is, among others. A company that checks all ten boxes is not perfect, but it has passed a demanding financial filter. Today, 74 stocks pass that filter in my ranking (see how I score companies).

Once quality is verified separately, what is left is the question of price. Here is a representative sample, from cheapest to most expensive, of current valuations among those 74 top rated stocks:

The spread is enormous: from under 3 times the cash it generates for RenaissanceRe (RNR) to over 85 times for Shopify (SHOP). In between, most names sit in a 15 to 30 times range, which historically is close to what the market tends to pay for a quality business with reasonable growth.

How to read this spread without getting fooled

A low number means nothing on its own. A reinsurer like RenaissanceRe or a regional airline like SkyWest (SKYW) are valued at just a few times their cash because the market does not price in much future growth or scarcity for them, not because they are bad businesses. That is exactly why quality has to be checked before looking at price: here, it already has been, so a low price becomes a real signal instead of a value trap.

At the other end, Shopify (SHOP) or ASML (ASML.AS) trade at 50 to 85 times their cash because the market is betting on years of strong growth ahead, in online commerce or in the machines that manufacture the world's most advanced chips. Expensive does not mean bad either: it means you are paying today for growth the company still has to deliver. The risk is not in the sticker price, it is in the gap between what you pay and what actually gets delivered.

That is why I always look at both pieces of information together on a page like Paylocity (PCTY) or Shopify (SHOP): quality first, anchored in the company's fundamentals, then price, which keeps moving around that quality.

The trap of comparing valuations across different industries

One last trap: comparing the P/FCF of an insurer and a software publisher as if they were playing the same game. An insurer like W. R. Berkley (WRB) or Cincinnati Financial (CINF) produces predictable, steady cash, but rarely fast growing cash: the market prices it accordingly, around 7 times its cash. A software company like Intuit (INTU) or GoDaddy (GDDY) has a different growth profile, and therefore a different valuation, even at comparable quality.

Comparing the two as if a lower number were always more attractive is like comparing a bond yield to a stock's return without accounting for risk. The right habit is to compare a stock to its own valuation history, and to its direct peers in the same industry, never to the whole market lumped together.

What actually moved: the Paychex example

I am not going to tell you a made up story like: the average P/FCF dropped some percent since June. I do not have a verified record of last month's exact number for every one of these stocks, and inventing a comparison would be exactly the kind of shortcut I criticize in lazy analysis. What I can do instead is show you a concrete example of what actually moves the denominator.

Paychex (PAYX), a name close to this table, closed its fiscal year in late May and released its full year results on June 24, 2026: quarterly revenue of 1.61 billion dollars, up 12.6 percent year over year, full year revenue of 6.5 billion dollars, up 17 percent, and adjusted earnings per share of 1.32 dollars. That quarter now replaces, in the trailing twelve month calculation, the quarter reported a year earlier.

In practice, the valuation shown today for Paychex already reflects that refreshed annual figure. In a month, a different quarter will drop out of the calculation and a new one will enter. That mechanism, quiet but constant, is what you should keep in mind every time you read a valuation ratio without an exact date attached to it.

How I track this over time, in practice

My habit is to revisit a valuation at two specific moments: right after a company reports quarterly earnings, because the denominator just changed, and after a significant share price move, because that is the numerator moving. Outside of those two triggers, re-checking a P/FCF rarely tells you anything new.

Being able to do exactly that, in a few seconds, for any of the 74 stocks currently rated at the top of my quality scale, or for any other stock on the market, is precisely why I built my investing site. The quality score barely moves from one month to the next; the price never stops.

That is also why I republish this kind of snapshot regularly, after each major quarterly earnings season (late January, late April, late July, late October, plus offset fiscal year ends like Paychex's). The goal is never to guess a move, but to give you an honest, dated reading that you can compare yourself from one season to the next by keeping your own notes.

FAQ

Why does a stock's P/FCF change even without major news?

Because the share price, the numerator, moves every day the market is open, even without company specific news. The denominator only moves in steps, at each quarterly earnings release.

What exactly is the P/FCF ratio?

The share price divided by free cash flow, the cash a company actually generates after paying its expenses and reinvestment needs. A P/FCF of 15 means you are paying today for fifteen years of that cash.

Is a stock valued at 3 times its cash automatically a bargain?

No. A low price only matters if the company's quality has already been checked separately. For the names in this ranking, it has: the top score reflects ten financial criteria, not the price.

How often should you recheck a stock's valuation?

At minimum after every quarterly earnings release, since that updates the trailing twelve month free cash flow, and after any sharp share price move.

Where can you see the current valuation of a specific stock?

On its dedicated page on my site, at /analyse/ followed by the ticker symbol, or on the full ranking, which updates continuously.

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About the author

Written by Lubin Danilo, founder of Lubin Investment. A self-taught individual investor, I find fundamental analysis fascinating, and it has delivered excellent results. For three years now, my performance has beaten the S&P 500. But analyzing every stock took too much time: sites with incomplete data, calculation methods and criteria never aligned with mine. And spotting the best stocks was just as time-consuming, even with my own well-defined checklist. So I put my software development background to work to build this software, base my investment strategy on its results, and share it with people who share the same passion as me. It judges a company's quality and its price separately, using criteria drawn from the financial literature (Warren Buffett, Michael Mauboussin, Aswath Damodaran).