valueinvesting
If I were only able to analyze a single metric before investing in a company it would be ROIC (Return on Invested Capital). Fundamentally, a company creates value by taking capital from investors (both debt and equity) to generate cash flows in the future. A company only creates value to the extent that the return (ROIC) it generates is above its cost of capital (WACC), which we use to discount the future cash flows. The higher a company’s ROIC the greater the return it generates and ultimately the higher the cash flows it produces. Thus, the combination of growth and ROIC drives value creatio...
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Crescat Capital commentary for the month ended April 30, 2023, titled, “Whistling Past The Graveyard.” US policymakers continue to act as if they have the stability of the financial system, the economy, and consumer prices under control. Instead, their ongoing deficit spending and debt monetization since the 2008 crisis have created a trifecta of macro imbalances: 1. Historic overvaluation of long-duration financial assets;2. Systemic solvency problems posed by excessive leverage; and3. Embedded structural inflation. This unholy trinity foreshadows both secular stagflation and a near-term hard...
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My first trip to the Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B) annual meeting in Omaha was over 20 years ago, in 2002. I was a rookie analyst at Fidelity Investments, and the firm sent a whole contingent of analysts and portfolio managers for the annual pilgrimage. It was quite an initiation into the cult of Warren Buffett. The size of the gathering was quite modest by today’s standards, a “mere” 10,000 attendees. Working for one of the largest investment firms had its perks – Morgan Stanley hosted a dinner with Warren the night before the meeting for its most important clients, and I got t...
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Lowell Capital’s Investment IdeaLowell Capital has not featured in Hidden Value Stocks in the past, but the value-focused firm outperformed in a tough market last year, returning -6.7% for the year to the end of November, compared to the S&P 500’s -13.1% return. Lowell’s area of focus is small-cap value, with a preference for “under-followed or misunderstood companies which generate strong cash flows.” In its December letter to investors, the firm discussed its current largest long position, Sylvamo Corp (NYSE:SLVM). Here’s a condensed version of the fund’s analysis: “Sylvamo Corp produces and...
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If you want to attend the London Value Investor Conference 2023 next week you need to register now with the ValueWalk discount before April 15. ValueWalk subscribers get a £240 registration discount using code“VALUEWALK_LVIC23“ Q1 2023 hedge fund letters, conferences and more There will be over 15 investment ideas presented in detail at the conference – during presentations with the following titles: The Next SurpriseBank to the FutureValue Investing Isn’t What You Think It IsA Different Kind of Value Investing. A Better Kind of Private EquityWhy Dividends MatterQuantum India: Finding Value in...
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Owning shares of Berkshire Hathaway stock is a way for investors to gain exposure to many of Warren Buffett’s favorite stocks.A key driver of the company’s overall performance is its insurance business, which allows it to put the float it receives from policyholders to work in the market.With an ample supply of cash on hand, the company is well positioned to deploy capital if it senses a buying opportunity.5 stocks we like better than Berkshire HathawayInvestors could do worse than buying stocks owned by Warren Buffett. Some of the most famous Warren Buffett stocks include Apple Inc. (NASDAQ:A...
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What makes a retail business successful? Indeed, how do we measure the success of such a company? Profitability, margins, sales per store? Returns on capital? The number of stores the business operates out of or their geographical presence? Staff retention and company culture? Customer loyalty? You could successfully argue that all of these things and indeed many more comprise the traits that determine their success. But what makes them truly great? What does a business have to do to be so good, so innovative and so successful that it would stand out from thousands of companies and be attracti...
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Dan Loeb’s letter to Third Point investors for the fourth quarter ended December 2022, discussing his new long position in AIG. Dear Investor: During the Fourth Quarter, Third Point returned 1.2% net in the flagship Offshore Fund and 1.2% net in the Ultra Fund. Assets under management on December 31, 2022 were approximately $12.6 billion. Q4 2022 hedge fund letters, conferences and more The top five winners for the quarter were Pacific Gas and Electric Co. (NYSE:PCG), Bath & Body Works, Inc. (NYSE:BBWI), Twitter, Inc. (NYSE:TWTR), DuPont de Nemours, Inc. (NYSE:DD), and TJX Companies, Inc (NYSE...
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Nu Holdings may be seen as an unusual holding in Buffett’s portfolio, but there’s a good reason for it.The company has a huge addressable market in South America, adding millions of new users to its digital platforms every month.Wall Street also believes its share could double in value in the future.5 stocks we like better than NUAs a pioneer of the value investing methodology, Warren Buffett is most famous for investing in blue chip brands found in millions of homes and businesses throughout the United States. Q4 2022 hedge fund letters, conferences and more Find A Qualified Financial Advisor...
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David Einhorn’s 2022 letter to investors. Dear Partner: The Greenlight Capital funds (the “Partnerships”) returned 36.6% in 2022, net of fees and expenses, compared to an 18.1% loss for the S&P 500 index. Since the inception of Greenlight Capital in May 1996, our Partnerships have returned 2,358.3% cumulatively or 12.8% annualized, both net of fees and expenses.1 Over the same period, the S&P 500 index has returned 864.0% or 8.9% annualized. Greenlight’s investors have earned $5.2 billion, net of fees and expenses, since inception. Q4 2022 hedge fund letters, conferences and more Our successfu...
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