What I like to see in a business:
1. Consistent earnings growth
2. Good return on equity
3. Manageable or no debt
4. Quality management that's committed to the company.
5. A simple business model.
Always judge the success of your company by the proper metrics - sustained growth and good returns on equity - rather than by a company's stock price.
Stock price, is not always a reflection of a company's quality or value.
Keep INVESTING Simple and Safe (KISS) ****Investment Philosophy, Strategy and various Valuation Methods**** The same forces that bring risk into investing in the stock market also make possible the large gains many investors enjoy. It’s true that the fluctuations in the market make for losses as well as gains but if you have a proven strategy and stick with it over the long term you will be a winner!****Warren Buffett: Rule No. 1 - Never lose money. Rule No. 2 - Never forget Rule No. 1.
Showing posts with label buy quality. Show all posts
Showing posts with label buy quality. Show all posts
Monday 9 September 2013
Tuesday 30 July 2013
Dividends can help to mitigate risk. When buying a dividend stock, the quality of the company is the number one consideration.
Let's assume that the stock stays the same or, even worse, actually goes down a little in the short term.
Or to put it another way, you still get some income from the investment which could be seen to offset your loss in the share price, should that have happened.
As a general principle, I tend to invest only in businesses that have a sustained track record of paying dividends.
"When buying a dividend stock, the quality of the company is the number one consideration. Given enough time, a quality company will always rise above lesser competition. When your holding period is forever, it is inevitable that a superior stock will eventually out-perform second-tier players." - Warren Buffett
In an ideal situation, you will buy a share in a business which is undervalued, and over time the share will increase in value to the point at which you are very pleased with the capital gain you have seen in the share price. Then guess what, you also receive a cash bonus in the form of a dividend payment! Sounds like a great concept to me. :-)
- If you have invested in a business that does not pay any dividends, you have no compensation for what has happened, just less money than you had when you invested.
- However, if the business pays dividends and continues to honour that commitment (in the same way that companies like Coca Cola have historically done) then it mitigates some of your risk.
Or to put it another way, you still get some income from the investment which could be seen to offset your loss in the share price, should that have happened.
As a general principle, I tend to invest only in businesses that have a sustained track record of paying dividends.
"When buying a dividend stock, the quality of the company is the number one consideration. Given enough time, a quality company will always rise above lesser competition. When your holding period is forever, it is inevitable that a superior stock will eventually out-perform second-tier players." - Warren Buffett
In an ideal situation, you will buy a share in a business which is undervalued, and over time the share will increase in value to the point at which you are very pleased with the capital gain you have seen in the share price. Then guess what, you also receive a cash bonus in the form of a dividend payment! Sounds like a great concept to me. :-)
Friday 26 July 2013
Remember, ALWAYS be ready for a stock market correction!
Remember, ALWAYS be ready for a stock market correction!
Do not participate in the business of predicting what the stock market is going to do over short periods of time.
Very simply, you cannot predict an irrational system and emotional investors.
Warren Buffett's quote: "The stock market is nothing more than an excuse to see what people are willing to do foolish today."
One of the keys to successful INVESTING is buying into quality companies and continuing to do so over time, not the "stock market."
Of course, there are risks when you invest in a company. The fundamentals may change. The value of the company may decrease over time.
This is why one must diversify appropriately based on one's investment objectives and tolerance for market volatility and investment risk.
At the end of the day, bull market or bear market, who or why care?
A MAJOR KEY TO SUCCESSFUL INVESTING HAS ALWAYS BEEN AND WILL ALWAYS BE, THE PROCESS OF INVESTING IN QUALITY COMPANIES AND TAKING ADVANTAGE OF MARKET VOLATILITY TO CONTINUALLY INVEST IN COMPANIES ON SALE OVER TIME.
Link: investingwithclarity.com/2012/08/09/bull-bear-why-care/
Do not participate in the business of predicting what the stock market is going to do over short periods of time.
Very simply, you cannot predict an irrational system and emotional investors.
Warren Buffett's quote: "The stock market is nothing more than an excuse to see what people are willing to do foolish today."
One of the keys to successful INVESTING is buying into quality companies and continuing to do so over time, not the "stock market."
Of course, there are risks when you invest in a company. The fundamentals may change. The value of the company may decrease over time.
This is why one must diversify appropriately based on one's investment objectives and tolerance for market volatility and investment risk.
At the end of the day, bull market or bear market, who or why care?
A MAJOR KEY TO SUCCESSFUL INVESTING HAS ALWAYS BEEN AND WILL ALWAYS BE, THE PROCESS OF INVESTING IN QUALITY COMPANIES AND TAKING ADVANTAGE OF MARKET VOLATILITY TO CONTINUALLY INVEST IN COMPANIES ON SALE OVER TIME.
Link: investingwithclarity.com/2012/08/09/bull-bear-why-care/
Wednesday 3 April 2013
Best Stocks to Buy & Picking your stock - Two rules of value Investing
Follow these 2 rules and you will find investing in stocks is very profitable and very enjoyable too.
Rule 1: Find a wonderful business to invest in.
Rule 2: Buy its stock at a discount.
Wednesday 6 March 2013
Thursday 11 October 2012
Buffett: BUY OUTSTANDING BUSINESS at a significant discount to its intrinsic value.
If we make mistakes, Buffett confesses, it is either because of
(1) the price we paid,
(2) the management we joined, or,
(3) the future economics of the business.
Miscalculations in the third instance are, Buffett notes, the most common.
It is Buffett's intention not only to identify businesses that earn above-average returns, but to purchase these businesses at prices far below their indicated value. The margin of safety also provides opportunities for extraordinary stock returns.
If Buffett correctly identifies a company possessing above-average economic returns, the value of the shares of stock over the long term will steadily march upwards as the share price mimics the returns of the business.
If a company consistently earns 15% on equity, its share appreciation will advance more each year than the share price of a company that earns 10% on equity.
Additionally, if Buffett, by using the margin of safety, is able to buy this outstanding business at a significant discount to its intrinsic value, Berkshire will earn an extra bonus when the market corrects the price of the business.
"The market, like the Lord, helps those who help themselves." Buffett says, "But unlike the Lord, the market does not forgive those who know not what they do."
(1) the price we paid,
(2) the management we joined, or,
(3) the future economics of the business.
Miscalculations in the third instance are, Buffett notes, the most common.
It is Buffett's intention not only to identify businesses that earn above-average returns, but to purchase these businesses at prices far below their indicated value. The margin of safety also provides opportunities for extraordinary stock returns.
If Buffett correctly identifies a company possessing above-average economic returns, the value of the shares of stock over the long term will steadily march upwards as the share price mimics the returns of the business.
If a company consistently earns 15% on equity, its share appreciation will advance more each year than the share price of a company that earns 10% on equity.
Additionally, if Buffett, by using the margin of safety, is able to buy this outstanding business at a significant discount to its intrinsic value, Berkshire will earn an extra bonus when the market corrects the price of the business.
"The market, like the Lord, helps those who help themselves." Buffett says, "But unlike the Lord, the market does not forgive those who know not what they do."
Saturday 11 August 2012
Quality first, Price second
Philip Fisher: Quality first, Price second
Fisher formulated a clear and sensible investing strategy (which I'll get to in a second), wrote one of the best investment books of all time, Common Stocks and Uncommon Profits, and made a good deal of money for himself and his clients.
His son wrote that Phil's best advice was
-to "always think long term,"
-to "buy what you understand," and
-to own "not too many stocks."
Charles Munger, who is Buffett's partner, praised Fisher at the 1993 annual meeting of their company, Berkshire Hathaway Inc. (BRK/A): "Phil Fisher believed in concentrating in about 10 good investments and was happy with a limited number. That is very much in our playbook. And he believed in knowing a lot about the things he did invest in. And that's in our playbook, too. And the reason why it's in our playbook is that to some extent, we learned it from him."
In addition to the warning against over-diversification — or what Peter Lynch, the great Fidelity Magellan fund manager, calls "de-worse-ification" — the book makes three important points:
(1) First, don't worry too much about price. (Quality first, Price second)
- "Even in these earlier times [he's talking here about 1913], finding the really outstanding companies and staying with them through all the fluctuations of a gyrating market proved far more profitable to far more people than did the more colorful practice of trying to buy them cheap and sell them dear."
- In fretting about whether a stock is cheap or expensive, many investors miss out on owning great companies. My own rule is: quality first, price second.
(2) Second, Fisher says that investors must ask, "Does the company have a management of unquestionable integrity?"
(3) Finally, Fisher offered the best advice ever on selling stocks. "It is only occasionally," he wrote, "that there is any reason for selling at all."
Yes, but what are those occasions? They come down to this: Sell if a company hasdeteriorated in some important way. And I don't mean price!
Fisher's view, instead, is to look to the business — the company itself, not the stock.
"When companies deteriorate, they usually do so for one of two reasons:
- Either there has been a deterioration of management, or
- the company no longer has the prospect of increasing the markets for its product in the way it formerly did."
A stock-price decline can be a key signal: "Pay attention! Something may be wrong!" But the decline alone would not prompt me to sell. Nor would a rise in price.
Time to sell? If you did, you missed another doubling.
"How long should you hold a stock? As long as the good things that attracted you to the company are still there."
Fisher formulated a clear and sensible investing strategy (which I'll get to in a second), wrote one of the best investment books of all time, Common Stocks and Uncommon Profits, and made a good deal of money for himself and his clients.
His son wrote that Phil's best advice was
-to "always think long term,"
-to "buy what you understand," and
-to own "not too many stocks."
Charles Munger, who is Buffett's partner, praised Fisher at the 1993 annual meeting of their company, Berkshire Hathaway Inc. (BRK/A): "Phil Fisher believed in concentrating in about 10 good investments and was happy with a limited number. That is very much in our playbook. And he believed in knowing a lot about the things he did invest in. And that's in our playbook, too. And the reason why it's in our playbook is that to some extent, we learned it from him."
In addition to the warning against over-diversification — or what Peter Lynch, the great Fidelity Magellan fund manager, calls "de-worse-ification" — the book makes three important points:
(1) First, don't worry too much about price. (Quality first, Price second)
- "Even in these earlier times [he's talking here about 1913], finding the really outstanding companies and staying with them through all the fluctuations of a gyrating market proved far more profitable to far more people than did the more colorful practice of trying to buy them cheap and sell them dear."
- In fretting about whether a stock is cheap or expensive, many investors miss out on owning great companies. My own rule is: quality first, price second.
(2) Second, Fisher says that investors must ask, "Does the company have a management of unquestionable integrity?"
(3) Finally, Fisher offered the best advice ever on selling stocks. "It is only occasionally," he wrote, "that there is any reason for selling at all."
Yes, but what are those occasions? They come down to this: Sell if a company hasdeteriorated in some important way. And I don't mean price!
Fisher's view, instead, is to look to the business — the company itself, not the stock.
"When companies deteriorate, they usually do so for one of two reasons:
- Either there has been a deterioration of management, or
- the company no longer has the prospect of increasing the markets for its product in the way it formerly did."
A stock-price decline can be a key signal: "Pay attention! Something may be wrong!" But the decline alone would not prompt me to sell. Nor would a rise in price.
Time to sell? If you did, you missed another doubling.
"How long should you hold a stock? As long as the good things that attracted you to the company are still there."
Sunday 1 July 2012
Wednesday 27 June 2012
Five key questions in considering investment opportunities:
1. Is this a good business run by smart people?
This may include items such as quality of earnings, product lines, market sizes, management teams, and the sustainability of competitive positioning within the industry.
2. What is this company worth?
Value investors perform fair value assessments that allow them to establish a range of prices that would determine the fair value of the company, based on measures such as normalized free cash flow, break-up , takeout, and/or asset values. Exit valuation assessment provides a rational "fair value" target price, and indicates the upside opportunity from the current stock price.
3. How attractive is the price for this company, and what should I pay for it?
Price assessment allows the individual to understand fully the price at which the stock market is currently valuing the company. In this analysis, the investor takes several factors into account by essentially answering the question. Why is the company afforded its current low valuation? For example, a company with an attractive valuation at first glance may not prove to be so appealing after a proper assessment of its accounting strategy or its competitive position relative to its peers.
4. How realistic is the most effective catalyst?
Catalyst identification and effectiveness bridges the gap between the current asking price and what value investors think the company is worth based on their exit valution assessment. The key here lies in making sure that the catalyst identified to "unlock" value in the company is very likely to occur. Potential effective catalysts may include the breakup of the company, a divestiture, new management, or an ongoing internal catalyst, such as a company's culture.
5. What is my margin of safety at my purchase price?
Buying shares with a margin of safety is essentially owning shares cheap enough that the price paid is heavily supported by the underlying economics of the business, asset values, and cash on the balance sheet. If a company's stock trades below this "margin of safety" price level for a length of time, it would be reasonable to believe that the company is more likely to be sold to a strategic or financial buyer, broken up, or liquidated to realize its true intrinsic value - thus making such shares safer to own.
Sunday 24 June 2012
There is no price low enough to make a poor quality company a good investment.
If you're in doubt about the quality of a company as an investment, abandon the study and look for another candidate.
When in doubt, throw it out.
Abandon your study and go on to another. There is no price low enough to make a poor quality company a good investment.
The worse a company performs, the better value its stock will appear to be.
Because declining fundamentals will prompt a company's shareholders to sell, the price will decline. This will cause all the value indicators to show that the price has become a bargain. It's not!
When the stock is selling at a price below that for which it has customarily sold, you will want to check to see why - what current investors know that you don't.
When in doubt, throw it out.
Abandon your study and go on to another. There is no price low enough to make a poor quality company a good investment.
The worse a company performs, the better value its stock will appear to be.
Because declining fundamentals will prompt a company's shareholders to sell, the price will decline. This will cause all the value indicators to show that the price has become a bargain. It's not!
When the stock is selling at a price below that for which it has customarily sold, you will want to check to see why - what current investors know that you don't.
Friday 8 June 2012
Evaluating Company Quality
To buy a good stock, you only need to know if the company is a good-quality company and if the price you have to pay for its stock is reasonable.
A good-quality company is one whose growth, upon which you rely to increase the value of your investment, is strong and stable, and one in which management's efficeincy will enable it to continue that satisfactory growth.
The first assessment of a company's quality is the analysis of its sales and earnings growth.
As a company passes through its life cycle, its success and its potential as an investment can be sized up at a glance.
Companies that are good candidates are easy to spot.
More important, companies that are not good candidates are even easier to spot.
As you become more experienced, you'll be able to gain more insight into what is in store for a company and why.
A good-quality company is one whose growth, upon which you rely to increase the value of your investment, is strong and stable, and one in which management's efficeincy will enable it to continue that satisfactory growth.
The first assessment of a company's quality is the analysis of its sales and earnings growth.
As a company passes through its life cycle, its success and its potential as an investment can be sized up at a glance.
Companies that are good candidates are easy to spot.
More important, companies that are not good candidates are even easier to spot.
As you become more experienced, you'll be able to gain more insight into what is in store for a company and why.
Friday 4 May 2012
Quality: There are a relatively small number of truly outstanding companies. Their shares frequently can’t be bought at attractive prices.
Investment is most intelligent when it is most businesslike.
Ben Graham - "The Intelligent Investor"
“There are a relatively small number of truly outstanding companies. Their shares frequently can’t be bought at attractive prices. Therefore, when favourable prices exist, full advantage should be taken of the situation.”
Philip A. Fisher, ‘Developing an Investment Philosophy’, 1980
The moral of this is that only an excellent business bought at an excellent price makes an excellent investment. One without the other just won’t do.
Investors start from the premise that there is no philosophical distinction between part ownership (i.e. buying shares in a company) and outright ownership (i.e. buying the business in its entirety). All we are looking for is pieces of businesses to buy at the right price.
Warren Buffett put it thus:
“Stocks are simple. All you do is buy shares in a great business for less than the business is intrinsically worth, with managers of the highest integrity and ability. Then you own those shares forever.”¹
Criteria for Stock Selection
It follows that there are several important criteria that companies selected for investment consideration must exhibit in abundance. Among these are that:
http://www.sanford-deland.com/pages/quality+of+businessBen Graham - "The Intelligent Investor"
“There are a relatively small number of truly outstanding companies. Their shares frequently can’t be bought at attractive prices. Therefore, when favourable prices exist, full advantage should be taken of the situation.”
Philip A. Fisher, ‘Developing an Investment Philosophy’, 1980
The moral of this is that only an excellent business bought at an excellent price makes an excellent investment. One without the other just won’t do.
Investors start from the premise that there is no philosophical distinction between part ownership (i.e. buying shares in a company) and outright ownership (i.e. buying the business in its entirety). All we are looking for is pieces of businesses to buy at the right price.
Warren Buffett put it thus:
“Stocks are simple. All you do is buy shares in a great business for less than the business is intrinsically worth, with managers of the highest integrity and ability. Then you own those shares forever.”¹
Criteria for Stock Selection
It follows that there are several important criteria that companies selected for investment consideration must exhibit in abundance. Among these are that:
- Their business model is easily comprehensible;
- They produce transparent financial statements;
- They demonstrate consistent operational performance with earnings being relatively predicable;
- They generate high returns on capital employed;
- They convert a high proportion of accounting earnings into free cash;
- Their balance sheet is strong without unduly high financial leverage;
- Their management is focused on delivering shareholder value and is candid with the owners of the business;
- Their growth strategy is more likely to rely on organic initiatives than frenetic acquisition activity.
Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause their share prices to be misappraised. Again as Buffett puts it, “Price is what you pay, value is what you get”.² Having identified a universe of truly outstanding companies, we must wait until their shares can be bought at a price on the stockmarket that is substantially less than their true economic worth.
References:
¹ Warren E. Buffett, Forbes, 6 August 1990
² Warren E. Buffett, Letter to Partners (Buffett Partnership), July 1966
Thursday 26 April 2012
How to do a stock research & analysis.
Opto Circuits India Ltd - Stock Research & Analysis
(15 Dec 2008)
Synopsis
Opto Circuits is a small company in Medical Electronics industry with focus in the niche areas of invasive (coronary stents) and non-invasive (sensors, patient monitors) segments. Prior to '2002 Opto's Revenues were less than Rs. 50 Cr. Today Revenues stand at Rs.468 Cr, with exports accounting for more than 95% of Revenues. Opto Circuits is based in Bangalore India and operates out of offices established in USA, Europe, South-East Asia, Latin America and the Middle East and boasts of a strong international distribution network present in over 70 countries.
The Numbers speak for themselves. Net profit margins are healthy (over 28%), great return on equity (~ 40%, unmatched in the Medical Electronics industry), and solid return on invested capital ratios (over 45%). Financial health has been steadily improving over the years with comfortable financial leverage (1.34) and Debt to equity (0.31), with solid Current & Quick ratios. However, Opto Circuits still has a long way to go before it can show loads of excess cash on its books, due to its aggressive business expansion. Free Cash Flow as a percentage of sales is ~6 percent. It has consistently increased Dividends per share and has a unique track record of rewarding shareholders with bonus shares every year, for the 7th straight year! Opto Circuits seems to enjoy an above-average Economic Moat and fares very well when compared to its peers in this Peer Comparison snapshot.
Though there are Significant Risks going forward, Opto Circuits has lots of positives going for it. Over the last 7 years since FY2002, Opto Circuits Revenues have clocked a long term sales growth of over 45% while long term EPS growth has galloped at a handsome 60% plus. It has been working steadily grow its business through pursuing organic growth through investments in manufacturing capacities and penetrating into newer markets, supplemented by inorganic growth through judicious acquisitions. To its credit Opto circuits has managed acquisitions so far quite well, drawing synergies by leveraging distribution networks and lower-cost manufacturing bases. There is some evidence of Sustainable Growth over the medium term. We posed a few questions to Opto Circuits Management to be able to understand and assess its longer-term prospects and growth sustainability, better.
Opto's track record so far evidences early signs of being served by a Competent Management Team. The stock is promising and there's nothing wrong with investing in a young growth company like Opto Circuits, as long as you know what you are getting into. It has a long way to go before it qualifies to be among the Core holdings in anyone's Portfolio. It’s a long shot, though one that might just pay you back many times over. However, this is only half the story because even the best companies are poor investments if purchased at too high a price. We cover Opto Circuits' stock valuation in the other half story.
Read more here:
Thursday 8 March 2012
Warren Buffett: About Socks and Stocks
Source: Letter to shareholders, 2008
Read more: http://www.businessinsider.com/warren-buffett-quotes-on-investing-2010-8?op=1#ixzz1oXHwI5c2
Saturday 4 February 2012
Warren Buffett Buys High Quality Companies
Warren Buffett loves high quality companies. He buys high quality business and holds them forever. Why? Because high quality companies do well in both good markets and bad markets.
GuruFocus' monthly Buffett-Munger Newsletter features the best Buffett-Munger bargains for today. These are companies of high quality, but that trade at far below their fair values.
Research shows that even in the "lost" decade from 2000 to 2009, high quality company stocks outperformed by more than 10% a year. GuruFocus' Buffett-Munger Screener is for high quality companies at reasonable prices.
In a recent interview Warren Buffett mentioned three companies that he finds attractive. Out of the three companies he mentioned, two of them are listed in GuruFocus' Buffett-Munger screener. Fortune magazine called this an "unintentional endorsement" from Warren Buffett.
GuruFocus' monthly Buffett-Munger Newsletter features the best Buffett-Munger bargains for today. These are companies of high quality, but that trade at far below their fair values.
Research shows that even in the "lost" decade from 2000 to 2009, high quality company stocks outperformed by more than 10% a year. GuruFocus' Buffett-Munger Screener is for high quality companies at reasonable prices.
In a recent interview Warren Buffett mentioned three companies that he finds attractive. Out of the three companies he mentioned, two of them are listed in GuruFocus' Buffett-Munger screener. Fortune magazine called this an "unintentional endorsement" from Warren Buffett.
Tuesday 27 December 2011
Price Matters
Price matters in the stock market.
Just like you wouldn't run out and pay $10 a gallon for gasoline, why would you pay 100 times earnings for a company that is growing 15% a year?
Do you think the people who paid $212 for Yahoo YHOO in January 2000 are ever going to get their money back?
Yahoo's a good company, but it may take a very long time for the stock to get back to its old highs.
The same could be said of many other technology stocks and also even those technology companies with moats around them that got clobbered in post 2000.
Remember - the single greatest determinant of a company's return in your portfolio is the price you pay for its shares.
As important as it is to understand the quality of a company - its growth prospects, competitive position, and so forth - it is even more vital that you pay a fair price for the firm's shares.
You'll make a lot more money buying decent firms with low valuations than by paying premium prices for premium companies. Why? Because the future is uncertain, and low valuations leave a lot more room for error.
Just like you wouldn't run out and pay $10 a gallon for gasoline, why would you pay 100 times earnings for a company that is growing 15% a year?
Do you think the people who paid $212 for Yahoo YHOO in January 2000 are ever going to get their money back?
Yahoo's a good company, but it may take a very long time for the stock to get back to its old highs.
The same could be said of many other technology stocks and also even those technology companies with moats around them that got clobbered in post 2000.
Remember - the single greatest determinant of a company's return in your portfolio is the price you pay for its shares.
As important as it is to understand the quality of a company - its growth prospects, competitive position, and so forth - it is even more vital that you pay a fair price for the firm's shares.
You'll make a lot more money buying decent firms with low valuations than by paying premium prices for premium companies. Why? Because the future is uncertain, and low valuations leave a lot more room for error.
Tuesday 25 October 2011
10 signs your stock will double
Nathan Bell
Read more: http://www.brisbanetimes.com.au/business/10-signs-your-stock-will-double-20111025-1mhax.html#ixzz1bmZEuPfP
October 25, 2011 - 11:30AM
Like our fingerprints, we each have a unique investing style. Value investors analyse financial statements and competitive advantages, chartists study share price trends and momentum, while others aimlessly follow strategies that amount to throwing darts at the financial pages.
In my experience stocks with a reasonable chance of doubling over a period of, say, three to five years, have things in common. Let's analyse 10 signs to watch out for.
1. Out of favour. This is potentially a value investor's most financially rewarding situation - a stock that's out of favour and, with any luck, even hated. Many of our most lucrative investments have risen from the depths of despair.
Take Cochlear for example. In 2004 its woes included a change of chief executive, two profit downgrades, and an inquiry into its selling practices by the US Department of Justice - all within a 10-month period. The share price fell below $20, but eventually climbed above $80. Following the recent recall, could it double again?
2. Hidden progress. Often a business's progress will take some time before revealing itself in the financial statements. Macquarie Bank couldn't do a thing right in 2002 according to the media. But an astute understanding of the bank's lucrative management fee model revealed it contained significant underlying growth that almost caused its share price to reach $100. With the market currently fixated on Europe, is Macquarie being underestimated again?
3. New technology. In certain industries companies can generate significant cost savings by introducing new technology. We recommended Cabcharge in 2003 partly because it was improving its operating margins with the implementation of electronic payment systems in taxis. This former market darling has also found itself out of favour recently.
4. Investment in R&D. The benefits of undertaking research and development and investing in specialist skills can take years to manifest themselves. Philip Fisher, in his book Common Stocks and Uncommon Profits, suggests that the best companies to buy are those investing heavily in R&D today to provide the profits of the future. Healthcare device manufacturers such as Cochlear and ResMed are following this path.
5. Industry tailwinds. Many investors have struck gold with resources stocks benefiting from the emergence of China and India as rapidly industrialising nations. That has added significantly to world demand for a wide range of commodities, such as oil and iron ore. The recent falls in prices of resources stocks and commodity prices could provide opportunities.
6. Changes in industry structure or the number of competitors can provide opportunities for the remaining businesses. Coates Hire was one we missed many years ago, when its acquisition of Wreckair removed a competitor and helped consolidate the industry just as the resources and construction boom began.
7. Owner-managers. Then there's the owner-manager effect, with the most successful companies run by business builders with their own money on the line, like Gerry Harvey of Harvey Norman. And then there are the company-men with long and successful track records like Brian McNamee at CSL. Time and again, the stocks that double do so because the company has exceptional management.
8. Insider buying. While a strong leader with a vested interest in performance is a big positive, so is evidence that directors are buying the stock for their own portfolios. While there are many reasons why an insider might sell, there is generally only one reason they buy in meaningful amounts. They believe the stock will go up.
9. Financial strength. Flimsy balance sheets indicate weakness and invite disaster. Leighton used to boast a very strong financial position as it operates in a very cyclical industry. That allowed it to withstand the pressure of lean years and prosper in the fat ones. More recently, though, it was forced to raise capital after writing off assets and using debt to expand overseas.
10. Unrecognised by the market. Finally, look for quality companies that are simply unrecognised. With around 2,000 listed stocks, there will always be opportunities for investors to uncover rough diamonds.
Independent thinking
See? It's that simple. But it isn't really is it? Without genuinely independent thinking and a thorough understanding of the facts as you see them, even finding appropriate stocks is difficult, let alone having the courage to take advantage of opportunities when they present themselves.
But that's what value investing is all about. You have to be ruthless about where you spend your time, but success is all the sweeter when your homework uncovers a gem.
This article contains general investment advice only (under AFSL 282288).
Nathan Bell is research director of Intelligent Investor.
In my experience stocks with a reasonable chance of doubling over a period of, say, three to five years, have things in common. Let's analyse 10 signs to watch out for.
1. Out of favour. This is potentially a value investor's most financially rewarding situation - a stock that's out of favour and, with any luck, even hated. Many of our most lucrative investments have risen from the depths of despair.
Take Cochlear for example. In 2004 its woes included a change of chief executive, two profit downgrades, and an inquiry into its selling practices by the US Department of Justice - all within a 10-month period. The share price fell below $20, but eventually climbed above $80. Following the recent recall, could it double again?
2. Hidden progress. Often a business's progress will take some time before revealing itself in the financial statements. Macquarie Bank couldn't do a thing right in 2002 according to the media. But an astute understanding of the bank's lucrative management fee model revealed it contained significant underlying growth that almost caused its share price to reach $100. With the market currently fixated on Europe, is Macquarie being underestimated again?
3. New technology. In certain industries companies can generate significant cost savings by introducing new technology. We recommended Cabcharge in 2003 partly because it was improving its operating margins with the implementation of electronic payment systems in taxis. This former market darling has also found itself out of favour recently.
4. Investment in R&D. The benefits of undertaking research and development and investing in specialist skills can take years to manifest themselves. Philip Fisher, in his book Common Stocks and Uncommon Profits, suggests that the best companies to buy are those investing heavily in R&D today to provide the profits of the future. Healthcare device manufacturers such as Cochlear and ResMed are following this path.
5. Industry tailwinds. Many investors have struck gold with resources stocks benefiting from the emergence of China and India as rapidly industrialising nations. That has added significantly to world demand for a wide range of commodities, such as oil and iron ore. The recent falls in prices of resources stocks and commodity prices could provide opportunities.
6. Changes in industry structure or the number of competitors can provide opportunities for the remaining businesses. Coates Hire was one we missed many years ago, when its acquisition of Wreckair removed a competitor and helped consolidate the industry just as the resources and construction boom began.
7. Owner-managers. Then there's the owner-manager effect, with the most successful companies run by business builders with their own money on the line, like Gerry Harvey of Harvey Norman. And then there are the company-men with long and successful track records like Brian McNamee at CSL. Time and again, the stocks that double do so because the company has exceptional management.
8. Insider buying. While a strong leader with a vested interest in performance is a big positive, so is evidence that directors are buying the stock for their own portfolios. While there are many reasons why an insider might sell, there is generally only one reason they buy in meaningful amounts. They believe the stock will go up.
9. Financial strength. Flimsy balance sheets indicate weakness and invite disaster. Leighton used to boast a very strong financial position as it operates in a very cyclical industry. That allowed it to withstand the pressure of lean years and prosper in the fat ones. More recently, though, it was forced to raise capital after writing off assets and using debt to expand overseas.
10. Unrecognised by the market. Finally, look for quality companies that are simply unrecognised. With around 2,000 listed stocks, there will always be opportunities for investors to uncover rough diamonds.
Independent thinking
See? It's that simple. But it isn't really is it? Without genuinely independent thinking and a thorough understanding of the facts as you see them, even finding appropriate stocks is difficult, let alone having the courage to take advantage of opportunities when they present themselves.
But that's what value investing is all about. You have to be ruthless about where you spend your time, but success is all the sweeter when your homework uncovers a gem.
This article contains general investment advice only (under AFSL 282288).
Nathan Bell is research director of Intelligent Investor.
Read more: http://www.brisbanetimes.com.au/business/10-signs-your-stock-will-double-20111025-1mhax.html#ixzz1bmZEuPfP
Tuesday 29 March 2011
How To Evaluate The Quality Of EPS
How To Evaluate The Quality Of EPS
by Rick Wayman
Earning per share (EPS) manipulation might be the second oldest profession, but there is a relatively easy way for investors to protect themselves. This article will show you how to evaluate the quality of any kind of EPS, and find out what it's telling you about a stock.
Tutorial: Examining Earnings Quality
Overview
The evaluation of earnings per share should be a relatively straightforward process, but thanks to the magic of accounting, it has become a game of smoke and mirrors, accompanied by constantly mutating versions that seem to have come out of "Alice in Wonderland". Instead of Tweedle-Dee and Tweedle-Dum we have pro forma EPS and EBITDA. And, despite rumors to the contrary, the whisper number - the Cheshire cat of Wall Street - continues to exist as guidance.
To be fair, this situation cannot be totally blamed on management. Wall Street deserves as much blame due to its myopic focus on the near-term and knee-jerk reactions to 1 cent misses. A forecast is always only a guess - nothing more, nothing less - but Wall Street often forgets this. This, however, does create opportunities for investors who can evaluate the quality of earnings over the long run and take advantage of market overreactions. (For background reading, check out Earnings Forecasts: A Primer.)
EPS Quality
Tutorial: Examining Earnings Quality
Overview
The evaluation of earnings per share should be a relatively straightforward process, but thanks to the magic of accounting, it has become a game of smoke and mirrors, accompanied by constantly mutating versions that seem to have come out of "Alice in Wonderland". Instead of Tweedle-Dee and Tweedle-Dum we have pro forma EPS and EBITDA. And, despite rumors to the contrary, the whisper number - the Cheshire cat of Wall Street - continues to exist as guidance.
To be fair, this situation cannot be totally blamed on management. Wall Street deserves as much blame due to its myopic focus on the near-term and knee-jerk reactions to 1 cent misses. A forecast is always only a guess - nothing more, nothing less - but Wall Street often forgets this. This, however, does create opportunities for investors who can evaluate the quality of earnings over the long run and take advantage of market overreactions. (For background reading, check out Earnings Forecasts: A Primer.)
EPS Quality
High-quality EPS means that the number is a relatively true representation of what the company actually earned (i.e. cash generated). But while evaluating EPS cuts through a lot of the accounting gimmicks, it does not totally eliminate the risk that the financial statements are misrepresented. While it is becoming harder to manipulate the statement of cash flows, it can still be done.
A low-quality EPS number does not accurately portray what the company earned. GAAP EPS (earnings reported according to Generally Accepted Accounting Principles) may meet the letter of the law but may not truly reflect the earnings of the company. Sometimes GAAP requirements may be to blame for this discrepancy; other times it is due to choices made by management. In either case, a reported number that does not portray the real earnings of the company can mislead investors into making bad investment decisions.
How to Evaluate the Quality of EPS
The best way to evaluate quality is to compare operating cash flow per share to reported EPS. While this is an easy calculation to make, the required information is often not provided until months after results are announced, when the company files its 10-K or 10-Q with theSEC.
To determine earnings quality, investors can rely on operating cash flow. The company can show a positive earnings on the income statement while also bearing a negative cash flow. This is not a good situation to be in for a long time, because it means that the company has to borrow money to keep operating. And at some point, the bank will stop lending and want to be repaid. A negative cash flow also indicates that there is a fundamental operating problem: either inventory is not selling or receivables are not getting collected. "Cash is king" is one of the few real truisms on Wall Street, and companies that don't generate cash are not around for long. Want proof? Just look at how many of the dotcom wonders survived! (To learn more about what happened, see Why did dotcom companies crash so drastically?)
If operating cash flow per share (operating cash flow divided by the number of shares used to calculate EPS) is greater than reported EPS, earnings are of a high quality because the company is generating more cash than is reported on the income statement. Reported (GAAP) earnings, therefore, understate the profitability of the company.
If operating cash flow per share is less than reported EPS, it means that the company is generating less cash than is represented by reported EPS. In this case, EPS is of low quality because it does not reflect the negative operating results of the company and overstates what the true (cash) operating results.
An Example
Let's say that Behemoth Software (BS for short) reported that its GAAP EPS was $1. Assume that this number was derived by following GAAP and that management did not fudge its books. And assume further that this number indicates an impressive growth rate of 20%. In most markets, investors would buy this stock.
However, if BS's operating cash flow per share were a negative 50 cents, it would indicate that the company really lost 50 cents of cash per share versus the reported $1. This means that there was a gap of $1.50 between the GAAP EPS and actual cash per share generated by operations. A red flag should alert investors that they need to do more research to determine the cause and duration of the shortfall. The 50 cent negative cash flow per share would have to be financed in some way, such as borrowing from a bank, issuing stock, or selling assets. These activities would be reflected in another section of the cash flow statement.
If BS's operating cash flow per share were $1.50, this would indicate that reported EPS was of high quality because actual cash that BS generated was 50 cents more than was reported under GAAP. A company that can consistently generate growing operating cash flows that are greater than GAAP earnings may be a rarity, but it is generally a very good investment. (To learn more about this metric, check out Operating Cash Flow: Better Than Net Income?)
Trends Are Also Important
To determine earnings quality, investors can rely on operating cash flow. The company can show a positive earnings on the income statement while also bearing a negative cash flow. This is not a good situation to be in for a long time, because it means that the company has to borrow money to keep operating. And at some point, the bank will stop lending and want to be repaid. A negative cash flow also indicates that there is a fundamental operating problem: either inventory is not selling or receivables are not getting collected. "Cash is king" is one of the few real truisms on Wall Street, and companies that don't generate cash are not around for long. Want proof? Just look at how many of the dotcom wonders survived! (To learn more about what happened, see Why did dotcom companies crash so drastically?)
If operating cash flow per share (operating cash flow divided by the number of shares used to calculate EPS) is greater than reported EPS, earnings are of a high quality because the company is generating more cash than is reported on the income statement. Reported (GAAP) earnings, therefore, understate the profitability of the company.
If operating cash flow per share is less than reported EPS, it means that the company is generating less cash than is represented by reported EPS. In this case, EPS is of low quality because it does not reflect the negative operating results of the company and overstates what the true (cash) operating results.
Watch: Earning Per Share |
An Example
Let's say that Behemoth Software (BS for short) reported that its GAAP EPS was $1. Assume that this number was derived by following GAAP and that management did not fudge its books. And assume further that this number indicates an impressive growth rate of 20%. In most markets, investors would buy this stock.
However, if BS's operating cash flow per share were a negative 50 cents, it would indicate that the company really lost 50 cents of cash per share versus the reported $1. This means that there was a gap of $1.50 between the GAAP EPS and actual cash per share generated by operations. A red flag should alert investors that they need to do more research to determine the cause and duration of the shortfall. The 50 cent negative cash flow per share would have to be financed in some way, such as borrowing from a bank, issuing stock, or selling assets. These activities would be reflected in another section of the cash flow statement.
If BS's operating cash flow per share were $1.50, this would indicate that reported EPS was of high quality because actual cash that BS generated was 50 cents more than was reported under GAAP. A company that can consistently generate growing operating cash flows that are greater than GAAP earnings may be a rarity, but it is generally a very good investment. (To learn more about this metric, check out Operating Cash Flow: Better Than Net Income?)
Trends Are Also Important
Because a negative cash flow may not necessarily be illegitimate, investors should analyze the trend of both reported EPS and operating cash flow per share (or net income and operating cash flow) in relation to industry trends. It is possible that an entire industry may generate negative operating cash flow due to cyclical causes. Operating cash flows may be negative also because of the company's need to invest in marketing, information systems and R&D. In these cases, the company is sacrificing near-term profitability for longer-term growth.
Evaluating trends will also help you spot the worst-case scenario, which occurs when a company reports increasingly negative operating cash flow and increasing GAAP EPS. As discussed above, there may be legitimate reasons for this discrepancy (economic cycles, the need to invest for future growth), but if the company is to survive, the discrepancy cannot last long. The appearance of growing GAAP EPS even though the company is actually losing money can mislead investors. This is why investors should evaluate the legitimacy of a growing GAAP by analyzing the trend in debt levels, times interest earned, days sales outstanding and inventory turnover. (To learn about why companies fudge cash flow, readCash Flow On Steroids: Why Companies Cheat.)
The Bottom Line
Evaluating trends will also help you spot the worst-case scenario, which occurs when a company reports increasingly negative operating cash flow and increasing GAAP EPS. As discussed above, there may be legitimate reasons for this discrepancy (economic cycles, the need to invest for future growth), but if the company is to survive, the discrepancy cannot last long. The appearance of growing GAAP EPS even though the company is actually losing money can mislead investors. This is why investors should evaluate the legitimacy of a growing GAAP by analyzing the trend in debt levels, times interest earned, days sales outstanding and inventory turnover. (To learn about why companies fudge cash flow, readCash Flow On Steroids: Why Companies Cheat.)
The Bottom Line
Without question, cash is king on Wall Street, and companies that generate a growing stream of operating cash flow per share are better investments than companies that post increased GAAP EPS growth and negative operating cash flow per share. The ideal situation occurs when operating cash flow per share exceeds GAAP EPS. The worst situation occurs when a company is constantly using cash (causing a negative operating cash flow) while showing positive GAAP EPS. Luckily, it is relatively easy for investors to evaluate the situation.
by Rick Wayman (Contact Author | Biography)
Thursday 24 February 2011
Philip Fisher: Quality first, Price second
Fisher formulated a clear and sensible investing strategy (which I'll get to in a second), wrote one of the best investment books of all time, Common Stocks and Uncommon Profits, and made a good deal of money for himself and his clients.
His son wrote that Phil's best advice was
Charles Munger, who is Buffett's partner, praised Fisher at the 1993 annual meeting of their company, Berkshire Hathaway Inc. (BRK/A): "Phil Fisher believed in concentrating in about 10 good investments and was happy with a limited number. That is very much in our playbook. And he believed in knowing a lot about the things he did invest in. And that's in our playbook, too. And the reason why it's in our playbook is that to some extent, we learned it from him."
In addition to the warning against over-diversification — or what Peter Lynch, the great Fidelity Magellan fund manager, calls "de-worse-ification" — the book makes three important points:
(1) First, don't worry too much about price. (Quality first, Price second)
(2) Second, Fisher says that investors must ask, "Does the company have a management of unquestionable integrity?"
(3) Finally, Fisher offered the best advice ever on selling stocks. "It is only occasionally," he wrote, "that there is any reason for selling at all."
Yes, but what are those occasions? They come down to this: Sell if a company has deteriorated in some important way. And I don't mean price!
Fisher's view, instead, is to look to the business — the company itself, not the stock.
"When companies deteriorate, they usually do so for one of two reasons:
Time to sell? If you did, you missed another doubling.
"How long should you hold a stock? As long as the good things that attracted you to the company are still there."
http://myinvestingnotes.blogspot.com/2010/09/learning-from-long-men-late-phil-carret.html
His son wrote that Phil's best advice was
- to "always think long term,"
- to "buy what you understand," and
- to own "not too many stocks."
Charles Munger, who is Buffett's partner, praised Fisher at the 1993 annual meeting of their company, Berkshire Hathaway Inc. (BRK/A): "Phil Fisher believed in concentrating in about 10 good investments and was happy with a limited number. That is very much in our playbook. And he believed in knowing a lot about the things he did invest in. And that's in our playbook, too. And the reason why it's in our playbook is that to some extent, we learned it from him."
In addition to the warning against over-diversification — or what Peter Lynch, the great Fidelity Magellan fund manager, calls "de-worse-ification" — the book makes three important points:
(1) First, don't worry too much about price. (Quality first, Price second)
- "Even in these earlier times [he's talking here about 1913], finding the really outstanding companies and staying with them through all the fluctuations of a gyrating market proved far more profitable to far more people than did the more colorful practice of trying to buy them cheap and sell them dear."
- In fretting about whether a stock is cheap or expensive, many investors miss out on owning great companies. My own rule is: quality first, price second.
(2) Second, Fisher says that investors must ask, "Does the company have a management of unquestionable integrity?"
(3) Finally, Fisher offered the best advice ever on selling stocks. "It is only occasionally," he wrote, "that there is any reason for selling at all."
Yes, but what are those occasions? They come down to this: Sell if a company has deteriorated in some important way. And I don't mean price!
Fisher's view, instead, is to look to the business — the company itself, not the stock.
"When companies deteriorate, they usually do so for one of two reasons:
- Either there has been a deterioration of management, or
- the company no longer has the prospect of increasing the markets for its product in the way it formerly did."
Time to sell? If you did, you missed another doubling.
"How long should you hold a stock? As long as the good things that attracted you to the company are still there."
http://myinvestingnotes.blogspot.com/2010/09/learning-from-long-men-late-phil-carret.html
Sunday 23 January 2011
Quality Investing
Quality investing
From Wikipedia, the free encyclopedia
Quality investing is an investment strategy based on clearly defined fundamental factors that seeks to identify companies with outstanding quality characteristics. The quality assessment is made based on soft (e.g. management credibility) and hard criteria (e.g. balance sheet stability). Quality Investing supports best overall rather than best-in-class approach as the specific industry’s or country’s quality is evaluated as well.
Benjamin Graham, the founding father of value investing, was the first to recognize the quality problem among equities back in the 1930s. Graham classified stocks as either quality or Low quality. He also observed that the greatest losses result not from buying quality at an excessively high price, but from buying Low quality at a price that seems good value.[1]
The quality issue in a corporate context attracted particular attention in the management economics literature following the development of the BCG matrix in 1970. Using the two specific dimensions of life cycle and the experience curve concept, the matrix allocates a company's products – and even companies themselves – to one of two quality classes (Cash Cows and Stars) or two Non-quality classes (question Marks and Dogs). Other important works on quality of corporate business can be found primarily among the US management literature. These include, for example, "In Search of Excellence" by Thomas Peters and Robert Waterman[2], "Built to Last" by Jim Collins and Jerry Porras[3], and "Good to Great" by Jim Collins[4].
Quality Investing gained credence in particular after the burst of Dot-com bubble in 2001 when investors learned of the spectacular failures of companies such as Enron and Worldcom. These corporate collapses focused investors’ awareness of quality from stock to stock. Investors started to pay more attention to quality of balance sheet, earnings quality , information transparency, corporate governance quality.
1. Market Positioning: quality company possesses an economic moat, which distinguishes it from peers and allows to conquer leading market position. The company operates in the industry which offers certain growth potential and has global trends (e.g. ageing population for pharmaceuticals industry) as tailwinds.
According to a number of studies the company can sustain its quality for about 11 months in average, which means that quantitative and qualitative monitoring of the company is done systematically.
From Wikipedia, the free encyclopedia
Quality investing is an investment strategy based on clearly defined fundamental factors that seeks to identify companies with outstanding quality characteristics. The quality assessment is made based on soft (e.g. management credibility) and hard criteria (e.g. balance sheet stability). Quality Investing supports best overall rather than best-in-class approach as the specific industry’s or country’s quality is evaluated as well.
Contents[hide] |
[edit]History
The idea for quality Investing originated in the bond and real estate investing, where both the quality and price of potential investments are determined by ratings and expert attestations. Later the concept was applied to enterprises in equity markets.
Benjamin Graham, the founding father of value investing, was the first to recognize the quality problem among equities back in the 1930s. Graham classified stocks as either quality or Low quality. He also observed that the greatest losses result not from buying quality at an excessively high price, but from buying Low quality at a price that seems good value.[1]
The quality issue in a corporate context attracted particular attention in the management economics literature following the development of the BCG matrix in 1970. Using the two specific dimensions of life cycle and the experience curve concept, the matrix allocates a company's products – and even companies themselves – to one of two quality classes (Cash Cows and Stars) or two Non-quality classes (question Marks and Dogs). Other important works on quality of corporate business can be found primarily among the US management literature. These include, for example, "In Search of Excellence" by Thomas Peters and Robert Waterman[2], "Built to Last" by Jim Collins and Jerry Porras[3], and "Good to Great" by Jim Collins[4].
Quality Investing gained credence in particular after the burst of Dot-com bubble in 2001 when investors learned of the spectacular failures of companies such as Enron and Worldcom. These corporate collapses focused investors’ awareness of quality from stock to stock. Investors started to pay more attention to quality of balance sheet, earnings quality , information transparency, corporate governance quality.
[edit]Identification of Corporate quality
As a rule, systematic quality investors identify quality stocks using a defined schedule of criteria that they have generally developed themselves and revise continually. Selection criteria that demonstrably influence and/or explain a company's business success or otherwise can be broken down into five categories:[5]
1. Market Positioning: quality company possesses an economic moat, which distinguishes it from peers and allows to conquer leading market position. The company operates in the industry which offers certain growth potential and has global trends (e.g. ageing population for pharmaceuticals industry) as tailwinds.
2. Business model: According to the BCG matrix, the business model of a quality company is usually classified as star (growing business model, large capex) or cash cow (established business model, ample cash flows, attractive dividend yield). Having a competitive advantage, quality company offers good product portfolio, well-established value chain and wide geographical span.
3. Corporate Governance: Evaluation of corporate management execution is mainly based on soft-criteria assessment. Quality company has professional management, which is limited in headcount (6-8 members in top management) and has a low turnover rate. Its corporate governance structure is transparent, plausible and accordingly organized.
4. Financial Strength: Solid balance sheet, high capital and sales profitability , ability to generate ample cash flows are key attributes of quality company. Quality company tends to demonstrate positive financial momentum for several years in a row. Earnings are of high quality, with operating cash flows exceeding net income, inventories and accounts receivables not growing faster than sales etc.
5. Attractive valuation: Valuation ultimately is related to quality, which is similar to investments in real estate. Attractive valuation, which is defined by high discounted cash flow (DCF), low P/E ratio and P/B ratio, becomes an important factor in quality investing process.
According to a number of studies the company can sustain its quality for about 11 months in average, which means that quantitative and qualitative monitoring of the company is done systematically.
[edit]Comparison to other investment models
Quality investing is an investment style that can be viewed independent of value investing and growth Investing. A quality portfolio may therefore also contain stocks with Growth and Value attributes.
Nowadays, Value Investing is based first and foremost on stock valuation. Certain valuation coefficients, such as the price/earnings and price/book ratios, are key elements here. Value is defined either by valuation level relative to the overall market or to the sector, or as the opposite of Growth. An analysis of the company's fundamentals is therefore secondary. Consequently, a Value investor will buy a company's stock because he believes that it is undervalued and that the company is a good one. A quality investor, meanwhile, will buy a company's stock because it is an excellent company that is also attractively valued.
Modern Growth Investing centers primarily on Growth stocks. The investor's decision rests equally on experts' profit forecasts and the company's earnings per share. Only stocks that are believed to generate high future profits and a strong growth in earnings per share are admitted to a Growth investor's portfolio. The share price at which these anticipated profits are bought, and the fundamental basis for growth, are secondary considerations. Growth investors thus focus on stocks exhibiting strong earnings expansion and high profit expectations, regardless of their valuation. Quality investors, meanwhile, favor stocks whose high earnings growth is rooted in a sound fundamental basis and whose price is justified. (QVM approach)
References
- ^ Benjamin Graham (1949). The Intelligent Investor , New York: Collins. ISBN 0-06-055566-1.
- ^ Thomas Peters and Robert Waterman (1982). In Search of Excellence. ISBN 0-06-015042-4
- ^ Jim Collins and Jerry Porras (1994). Built to Last. ISBN 978-0887307393
- ^ Jim Collins (2001). Good to Great . ISBN 978-0-06-662099-2
- ^ Weckherlin, P. / Hepp, M. (2006). Systematische Investments in Corporate Excellence, Verlag Neue Zürcher Zeitung. ISBN 3-03823-278-5.
[edit]See also
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