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Showing posts with label return on capital. Show all posts
Showing posts with label return on capital. Show all posts
Thursday 27 September 2018

My Golden Rule of Investing

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My Golden Rule of Investing:   Companies that grow revenues and earnings will see share prices grow over time. Over the long term, whe...

The market frequently forgets the important relationship between Return on Capital and Return on Stock

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Return on Capital Return on capital is a measure of a company's profitability.                 Return on Capital = Profit / Investe...
Tuesday 10 October 2017

Warren Buffett’s $1 test and how to tell if a company is allocating its capital wisely

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Buffett is essentially talking about return on invested capital. If a company invests $100 in something at the cost of capital of 10%, ...
Sunday 6 December 2015

Investment Decisions and Fundamentals of Value

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Investment Decision Rules: Accept all investments with Net Present Value greater than Zero. Accept all investments with Rates of Ret...
Sunday 7 June 2015

Which company is cheaper? (Understanding P/E, Earnings yield and EBIT/EV.)

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Consider two companies, Company A and Company B. They are actually the same company (i.e. the same sales, the same operating earnings, the...
Saturday 25 February 2012

Buffett would always take rates of return on total capital into account

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RETURN ON CAPITAL IS VERY IMPORTANT The example early on this page shows that debt financing can be used to increase the rate of return on ...

What rate of ROE does Warren Buffett look for?

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WHY WARREN BUFFETT THINKS THAT RETURN ON EQUITY IS IMPORTANT Just as a 10% return on a business is, all other things being equal, better th...

Why Warren Buffett thinks that ROE is Important

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Warren Buffett believes that the return that a company gets on its equity is one of the most important factors in making successful stock i...
Wednesday 28 December 2011

ROE and Internet Stocks

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As an example, consider the fastest growing segment of 1999, Internet stocks. Most Internet companies are growing rapidly , but few of th...

Why Return on Equity Matters

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Let's say you want to open a whole chain of restaurants. In the early years of building your business empire, you will be adding to...

Return on Equity - it is the long-term return on capital that excites

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The way analysts usually measure return on capital for publicly traded companies i s return on equity, or ROE.   ROE =  Net earnings / S...

Measuring Returns on Capital

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What makes a company great? It is not rapid growth. It's not landing on a best-of-the-year list. Rather , it is the ability to...
Tuesday 12 October 2010

Australia's 10 best businesses

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Australia's 10 best businesses Greg Hoffman October 5, 2010 - 2:59PM Computershare is one of the five ...
Wednesday 31 March 2010

Buffett (1981): Prefers buying 'easily-identifiable princes at toad-like prices'. These 'princes' are able to preserve margins and generate attractive return on capital year after year.

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Warren Buffett wrote in his 1981 letter. "Our acquisition decisions will be aimed at maximizing real economic benefits, not at maxim...
Wednesday 3 June 2009

Return on Capital

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Return on Capital Abbreviated as ROC, refers to a measure of how effectively a firm uses the money (borrowed or owned) invested in its opera...
Tuesday 21 April 2009

****Stock selection for long term investors

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Overview of the the market and stock selection for long term investors The Market There is much volatility in the market. This is due to...
Monday 12 January 2009

GROWTH'S VALUE

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GROWTH’S VALUE Growth is not free. Its price is the cost of capital necessary to support it. Growth adds value only when the return on capi...