Nuggets of Investing Wisdom

Nuggets of Investing Wisdom

A website for serious investors in common stocks

Skip to content
  • Home
  • About
  • Terms and Conditions
  • Login
  • Motherlode

economic performance

Profound errors in interpreting and using ROE and ROC

  • by Rodney Smith
  • Posted on May 30, 2022May 31, 2022
  • Part 6: The Hallmarks of Superb Businesses

I find it better to analyze a company’s cash flows, maintenance capex, growth capex and free cash flow in real dollar terms and measure them against the true value of the capital management has use of

Read More

The hunt for wonderful businesses

  • by Rodney Smith
  • Posted on November 3, 2019February 7, 2022
  • Part 6: The Hallmarks of Superb Businesses

Free cash flow yield can be a better indicator when return on capital (ROC) becomes a vanity metric that unduly flatters economic performance and management. We can charge management with the full cost of Economic Goodwill.

Read More

Be wary of using Return on Capital (ROC)

  • by Rodney Smith
  • Posted on October 21, 2019November 22, 2020
  • Part 6: The Hallmarks of Superb Businesses

Superb companies produce a very high return on capital. But when substantial intangible assets don’t show up on balance sheets, the ROC numbers are unduly flattering to management.

Read More

How This Site Works

The site has two parts – Nuggets and the Investing Motherlode. Nuggets is a blog. The Motherlode is a rich resource and is only available to Subscribers (free). To subscribe, click on the Login tab or on any link within the Motherlode and fill in the form. You can also subscribe, for free, to a monthly newsletter, Nuggets of Investing Wisdom, right to your inbox.

 

Categories

Privacy & Cookies: This site uses cookies. By using the website you consent to their use, and to the Terms and Conditions described in this link, and also available from the menu bar at the top of the page. Terms & Conditions
 

Loading Comments...
 

You must be logged in to post a comment.