The Owners' Portfolio
How we determine Margin of Safety
Price is a qualitative decision.
The Company
- How well do we know the product?
- Who are the customers?
- Management
- Margin of Safety
- Does the management have values and an entrepreneurial focus?
Screen / ranking
ROC = NOPAT / Invested Capital
NOPAT = Net Operating Profit Less Adjusted Taxes
Rank all companies above a chosen market cap by highest earnings yield and highest return on capital.
“The value of in-depth fundamental analysis is subject to diminishing marginal returns.”