๐๐ก๐ฒ ๐๐ฒ ๐๐จ๐ซ๐ญ๐๐จ๐ฅ๐ข๐จ ๐ข๐ฌ ๐ ๐ฎ๐ง๐๐๐ฆ๐๐ง๐ญ๐๐ฅ๐ฅ๐ฒ ๐๐ฎ๐ฉ๐๐ซ๐ข๐จ๐ซ ๐ญ๐จ ๐ญ๐ก๐ ๐&๐ ๐๐๐
๐๐๐๐ซ ๐๐จ๐ฉ๐ข๐๐ซ๐ฌ ๐๐ง๐ ๐๐จ๐ฅ๐ฅ๐จ๐ฐ๐๐ซ๐ฌ
I want to share insights into the strength of this portfolio, so you can recognize that it presents significant opportunities for value creation
When evaluating the quality of a portfolio, itโs essential to look beyond just the stock prices and focus on the fundamentals that drive long-term value creation. Iโve analyzed the key financial metrics of my portfolio compared to the average company in the S&P 500, and the results speak for themselves.
๐๐๐ญ๐ฎ๐ซ๐ง ๐จ๐ง ๐๐๐ฉ๐ข๐ญ๐๐ฅ ๐๐ฆ๐ฉ๐ฅ๐จ๐ฒ๐๐ (๐๐๐๐) My portfolio has a ROCE of 25.2%, significantly higher than the S&P 500's average of 18%. Overall, these companies are more efficient in generating profits from their capital investments.
๐๐ซ๐จ๐ฌ๐ฌ ๐๐๐ซ๐ ๐ข๐ง: At 57.3%, the gross margin in my portfolio companies is substantially above the 45% average in the S&P 500. This higher margin reflects a stronger pricing power and cost management.
๐๐ฉ๐๐ซ๐๐ญ๐ข๐ง๐ ๐๐๐ซ๐ ๐ข๐ง: My portfolio companies are achieving an operating margin of 31.6%, more than double the S&P 500's 15%.
๐๐๐ฌ๐ก ๐๐จ๐ง๐ฏ๐๐ซ๐ฌ๐ข๐จ๐ง: With a cash conversion rate of 101.3%, my portfolio companies are converting their profits into cash at a much faster rate than the S&P 500 average of 85%. This high conversion rate is crucial for sustaining growth, paying down debt, or returning cash to shareholders.
๐๐ง๐ญ๐๐ซ๐๐ฌ๐ญ ๐๐จ๐ฏ๐๐ซ: My companies have a interest cover ratio of 43.92, compared to the S&P 500's 10. This means that my companies are in a much stronger position to meet their interest obligations,
๐ ๐๐ ๐๐ข๐๐ฅ๐: Despite these superior fundamentals, my portfolio is valued similarly to the S&P 500 in terms of FCF yield, at 3.65% versus 3.70%. This presents a compelling opportunity, as the market is not fully appreciating the quality and potential of these businesses.
Please note that all the metrics mentioned are weighted averages
$AMZN (Amazon.com Inc)$V (Visa)$CPRT (Copart Inc)$COST (Costco Wholesale Corp)$ORLY (O'Reilly Automotive Inc)... Show More
