Value Investing Importance Of Return On Invested Capital When Investing

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• Importance Of Return On Invested Capital When Investing
• The most important questions for investors in 2018.
• Inflation-Proof Businesses?
• Quick question on shorts
• Looking for a CMBS annex A of Seritage growth properties JPMCC 2015-trust SGP

Importance Of Return On Invested Capital When Investing Posted: 01 Jan 2018 03:20 PM PST One of Warren Buffett's favourite formulas for valuing a company and its brand power is return on invested capital. While the concept is self-explanatory, it is a metric that unlocks hidden value for investors... ROIC is a brilliant metric for measuring the success of a company's brand, "moat", or sustainable competitive advantage. If a company has a high ROIC it means it can sustain high returns, even when competitors try to inevitably compete to steal these high returns. The metric gives investors a general viewpoint on how well a company generates returns (and how well it could beat the index) Below I have pulled up some great performers with a very high ROIC and I will compare them to the benchmark to show the power of ROIC! KLa Tenor is the largest player in the semi-conductor control segment - it controls almost 50% of the market. From 2013 to 2017, it boosted its ROIC from 29% to 56%. Since 1980 it has comfortable beaten the benchmark. https://ibb.co/fwoT1b Amgen Is another high performer was a 22% ROIC for most of its lifetime.. Since 1983, Amgen has crushed the S&P without mercy. https://ibb.co/jEJiZw Ross Stores Ross Stores is one retailer that is thriving in an Amazon lead world. It has had 20% ROIC for the past seven years and has compounded revenue at 8% for those years as well. Again, it has crushed the S&P. https://ibb.co/i6Pe7G Discover Financial Services DSF is another big player with 19% ROIC for the past several years. It has a customer satisfaction ranked first in customer satisfaction for the past three years. It has only gone public since the 2000s, yet it has comfortably outpaced the index since then... https://ibb.co/dKa81b It is not a coincidence that FAANG stocks are ranked the highest for returns on invested capital. Obviously Apple, Microsoft and the other tech behemoths ranks very very highly for ROIC. But another unlikely winner is MasterCard, which has returned 600% over the past few years - or 25% when compounded annually over a decade... https://ibb.co/bzrsSG Ignore ROIC calculations at your peril! I was wondering whether it would be possible to pull together a motif etc which invests in companies with a very high ROIC. I pretty much scraped this from a forum, so original post here: https://forum.basic-capital.com/t/the-importance-of-return-on-invested-capital/150 submitted by /u/the-lifestyle [link] [comments]

The most important questions for investors in 2018. Posted: 02 Jan 2018 04:25 AM PST submitted by /u/biben1 [link] [comments]

Inflation-Proof Businesses? Posted: 01 Jan 2018 07:55 AM PST I know it's hard to imagine inflation as a concern given the current interest rate environment, but let's perform a thought experiment: Imagine 5 years from now, inflation becomes the biggest risk to equities (remember, this happened in the 80's). In that circumstance, which businesses would you want to own? Here are a few examples that come to mind: % attached businesses: Companies that charge a percentage take rate are less at risk because their revenue automatically resets upward with inflation. Examples: American Express/Visa/MasterCard, OTAs, eBay, etc Companies with core assets bought in yesterday's dollars, paid by customers in today's dollars. Buffett uses the example of a bridge that was built years ago but with a toll price that can be adjusted for inflation. What other inflation proof business models can you think of? submitted by /u/occupybourbonst [link] [comments]

Quick question on shorts Posted: 01 Jan 2018 12:38 PM PST Hey guys just need some quick clarification on this Lets say you buy OTM Puts uncovered on a stock like SNAP that does not currently pay a dividend. Are your risks in this position then limited to just the dollar amount you spent on the contracts? i.e. stock goes up you just don't take your right to sell and they expire (I understand theres also the chance a dividened is introduced but with a negative cash flow company like SNAP thats less relevant) Thanks in advanced! submitted by /u/oneshareofpepsi [link] [comments]

Looking for a CMBS annex A of Seritage growth properties JPMCC 2015-trust SGP Posted: 01 Jan 2018 01:43 PM PST Hi, I am trying to do a property by property evaluation of seritage growh properties and the internet mentioned there is an annex A of the JPMCC 2015-trust SGP cmbs, but i could not find it. So if anyone can drop me a link that would be awesome. Here is more information about the CMBS rated by S&P https://www.spratings.com/documents/20184/769219/JPMCC+2015-SGP/7e96f0ab-3fab-4651-91b8-e9c29c5fe54b submitted by /u/neo01123 [link] [comments]

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