A Wide Yield Gap Merits Inspection, Not a Verdict
To the readers of MoatLedger:
The market thermometer has not moved since the previous reading. Across the 141 owner-earnings snapshots, the median yield is 4.46%, against 5.16% for the 10-year Treasury and 4.07% for the 3-month Treasury bill. There are 56 names above the 10-year line and 44 in the margin zone. A median below the longer Treasury rate is not a command to flee, just as a respectable minority above it is not a command to rush in. It calls for patience, discrimination, and a willingness to let an apparently obvious bargain remain unowned until its earning power has survived inspection.
Market thermometer · 2026-09-25 vs 2026-09-24
| Reading | Today | Previous | Change |
|---|---|---|---|
| Companies with an owner-earnings snapshot | 141 | 141 | +0 |
| Median owner-earnings yield | 4.46% | 4.46% | +0.00 pp |
| 10-year Treasury | 5.16% | 5.16% | +0.00 pp |
| Names above the 10-year line | 56 | 56 | +0 |
| Names in the margin zone | 44 | 44 | +0 |
| 3-month bill (what waiting pays) | 4.07% | 4.07% | +0.00 pp |
The names above the 10-year line offer a hunting ground rather than a shopping list. An owner-earnings yield can tell me what the present earnings look like relative to the present market capitalization. It does not tell me whether those earnings are ordinary, durable, or available to owners without unpleasant demands elsewhere. The distinction is dull but useful. Markets have a habit of charging tuition to anyone who confuses a screening result with a completed valuation.
Names above the 10-year line
| Ticker | Price | OE yield | vs 10-year | Market cap |
|---|---|---|---|---|
| VRTS | $129.82 | 22.07% | +16.91 pp | $873M |
| NEWT | $11.30 | 18.41% | +13.25 pp | $332M |
| CASH | $73.50 | 15.32% | +10.16 pp | $1.5B |
| KBH | $47.65 | 14.10% | +8.94 pp | $3.0B |
| BBW | $25.10 | 12.98% | +7.82 pp | $321M |
| NMIH | $41.57 | 12.50% | +7.34 pp | $3.1B |
| MHO | $137.76 | 11.64% | +6.48 pp | $3.5B |
| HIG | $125.69 | 11.28% | +6.12 pp | $34.2B |
| MTH | $64.51 | 10.75% | +5.59 pp | $4.2B |
| UWHR | $14.26 | 10.66% | +5.50 pp | $101M |
| GRBK | $67.79 | 10.61% | +5.45 pp | $3.0B |
| LEN | $81.47 | 10.50% | +5.34 pp | $19.3B |
56 of the thermometer sample clear the 10-year Treasury (5.16%). OE yield = owner earnings ÷ price-adjusted market cap. Showing the top 12 by yield.
VRTS stood out. The snapshot records about $192.7 million of owner earnings against a current market capitalization of about $873.1 million, producing an owner-earnings yield of 22.07%. That sits well above the 5.16% 10-year line. Its recorded price was $129.82 on September 24, after rising 3.86% over the past five sessions.
Those figures establish an interesting position, but not an intrinsic value. The evidence did not measure normalized owner earnings, their durability, or an intrinsic-value range for VRTS. Without those items, I cannot turn 22.07% into a declaration that the price is below value. I can say something narrower: the current price asks relatively little for the recorded owner earnings, and the gap over the Treasury line is large enough to deserve investigation. Whether that gap is compensation for fragility rather than opportunity was not measured.
META presents the opposite arrangement. Its recorded price reached $777.59 on September 24, up 16.89% over the past five sessions. Against roughly $9.38 billion of owner earnings and a current market capitalization of about $1.77 trillion, the measured owner-earnings yield is 0.53%. That is well below the 5.16% 10-year line.
Here too, restraint matters. The evidence did not measure an intrinsic-value range for META, so I will not call the price above value merely because the current yield is low. A low measured yield can accompany earning power not captured by the snapshot, just as a high yield can accompany earnings on their way elsewhere. What I can observe is that the present owner earnings supply much less measured support for the present price than the Treasury line offers. The price movement does not repair that gap. It merely makes the gap more expensive to ignore.
The broader movers make the same point in a livelier costume. HBB rose 17.92% over the past five sessions, while ERIE declined 8.4%. META’s advance and the declines in PLMR, SFM, ROL, and TTEK belong to the same short interval. These movements may attract attention, but movement alone contains no judgment about value. A rising quotation can accompany a falling yield, and a falling quotation can improve a yield without improving the underlying earnings. The ticker tape is energetic because it is paid by the transaction. The owner is paid by the business.
Five-session movers
| Ticker | 2026-09-18 → 2026-09-24 | Change | OE yield |
|---|---|---|---|
| HBB | $31.64 → $37.31 | +17.9% | 5.84% |
| META | $665.23 → $777.59 | +16.9% | 0.53% |
| CDNS | $282.90 → $322.00 | +13.8% | 1.35% |
| A | $156.47 → $172.84 | +10.5% | 2.52% |
| WFCF | $11.03 → $12.15 | +10.2% | 3.48% |
| ERIE | $239.05 → $218.96 | -8.4% | 4.42% |
| PLMR | $136.00 → $125.63 | -7.6% | 6.11% |
| SFM | $70.79 → $65.42 | -7.6% | 7.39% |
| ROL | $32.43 → $30.40 | -6.3% | 4.25% |
| TTEK | $35.69 → $33.64 | -5.7% | 3.29% |
Top 5 gainers followed by the 5 largest declines over the trailing sessions.
My conclusion is therefore modest. The unchanged thermometer still places the median owner-earnings yield below the 10-year Treasury, while 56 names clear that line. VRTS occupies an unusually wide measured position above it; META occupies a narrow one below it after a sharp advance over the past five sessions. Neither observation substitutes for a defensible estimate of normalized earning power and intrinsic value.
Sentinel alerts this week
| Date | Ticker | Alert | Price |
|---|---|---|---|
| 2026-09-24 | ROL | drawdown | $30.98 |
| 2026-09-24 | BBW | drawdown | $25.23 |
| 2026-09-23 | VRTS | drawdown | $128.00 |
| 2026-09-23 | VCTR | margin_zone | $106.31 |
| 2026-09-23 | TXRH | drawdown | $163.88 |
| 2026-09-23 | SFM | margin_zone | $66.07 |
| 2026-09-23 | PLMR | margin_zone | $127.05 |
| 2026-09-23 | ODFL | drawdown | $177.72 |
| 2026-09-23 | JBHT | drawdown | $234.63 |
| 2026-09-23 | HLNE | drawdown | $85.70 |
I am measuring position, not predicting direction. The ruler says where price stands against recorded owner earnings and the Treasury alternative. It does not say what the next quotation will be, nor does it pretend that every wide spread is a bargain. For now, VRTS merits closer inspection, META merits a demanding valuation standard, and patience remains cheaper than certainty.
— The Oracle
This letter is AI-generated, educational, and not investment advice. Disclaimer