On Goodwill Hunting & Hidden Value

Imagine the following: You get a call from an investment banker you are acquainted with. He chirpily informs you that you are in for a treat. It just so happens that due to circumstances, he is in the know of two companies that are in play. He goes on to tell you, that not only … Continue reading On Goodwill Hunting & Hidden Value →

Return on (re)Invested Capital | TripAdvisor Case Study

TripAdvisor will announce its 2019 fourth quarter and full-year results in a couple of days. The company began its life as a publicly-traded company on December 21, 2011, when it was spun-off from its parent Expedia (which itself had been spun-off Barry Diller’s IAC in 2005). Under the ticker symbol TRIP, TripAdvisor shares opened trading … Continue reading Return on (re)Invested Capital | TripAdvisor Case Study →

The Most Profitable Industry Ever?

Allan MacDonald, Senior Vice President and Portfolio Manager at Burgundy Asset Management Ltd presented at the Ben Graham Centre's 2018 Value Investing Conference. The topic of his talk was: Finding Great Investment Opportunities in New Business Models. Companies owned by their own customers One of the opportunists that Allan covers he refers to as Demutualization. The term … Continue reading The Most Profitable Industry Ever? →

The Profitability Factor

In 2012 Robert Novy-Marx wrote the paper The Other Side of Value:The Gross Profitability Premium. You could say that it is an attempt to test the hypothesis of Charles Munger and Warren Buffett that it’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price. The Gross … Continue reading The Profitability Factor →

The Penman-Nissim model of profitability analysis

Stephen Penman is a George O. May Professor of Financial Accounting at Columbia Business School. He is the author and co-author of acclaimed financial valuation textbooks, such as Financial Statement Analysis and Security Valuation as well as books aimed at a more general audience, such as Accounting for Growth. The Penman-Nissim Profitability Framework In 1999, Doron … Continue reading The Penman-Nissim model of profitability analysis →