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  • Getting An Edge With Customer Based Valuation

    In several posts, I have discussed companies that invest in growth mostly through intangible investment through the income statement (e.g., S&M, G&A, R&D) rather than capital expenditures, and I have highlighted how these investments are incorrectly categorized as expenses under GAAP. If adjustments for this income statement investment are not made, ROIC numbers can be…

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  • Bath & Body Works (BBWI): Surprisingly Strong ROIC & Stock Pitch (Sort Of)

    There are lots of things to dislike about retailers, and it’s especially easy to be dismissive of ones selling soap and candles in malls. But Bath & Body Works () capital productivity and track record of growth are probably stronger than you think. The business consistently generates excess returns on capital and has grown (organically)…

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  • ROIC Calculations Related To Operating Leases

    Quick Background On Lease Accounting Anyone who was a financial analyst before 2019 was likely trained to adjust some version of operating income, enterprise value, and leverage ratio calculations for leases. Why? Before that time, lease expenses related to operating leases were simply expensed in the income statement, and there was zero accounting for them…

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  • Squarespace (SQSP): Solid Capital Productivity

    I own Squarespace stock and in many respects, it’s a great case study for lots of the things I have written about calculating and analyzing ROIC. So I’m going to run through it in this post. What’s the bottom line? SQSP has a pretty attractive ROIC profile – here are the numbers (excluding goodwill and…

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  • Breaking Down ROIC For Hubspot Stock

    It would shock you how many people own, short, or just speak with authority about Hubspot stock without really understanding how the business makes money. Or maybe it wouldn’t, but it’s shocking to me. That’s why in my last post I tried to explain the business in a clear and concise way, in the context…

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  • Hubspot (HUBS): How Do They Make Money?

    As discussed here, if you want to have winning stock pitches, you need to nail the How Do They Make Make Money question. Here is an example of one I put together for Hubspot stock . Yes, for a 5-page stock pitch it would be shorter, but given that I had an entire blog post…

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  • Winning Stock Pitches: 8 Tips

    A key part of any successful written stock pitch is conveying in a clear, concise, and commonsense way how the company makes money. Yet, too often people write vague, disjointed, or hard-to-follow descriptions of how the business works. Why? Because it’s easier and faster. However, a solid understanding of the business makes it tangible to…

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  • The Gross Profitability Premium

    Discover how to pick a stock as we explore the best stocks to invest in right now along with the evolution of value investing and factor investing.

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  • Avantor (AVTR): ROIC Without Goodwill And Intangibles (2/2)

    This second post in our Avantor (AVTR) series, explores ROIC without goodwill and acquired intangibles. There’s tons of value here, so let’s dive in!

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  • Avantor (AVTR): Breaking Down ROIC (1/2)

    Here we look at an Avantor (AVTR) ROIC breakdown from Substack. Exploring the topic, we consider effective tax rates, competitor ROIC, & more!

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