Here's the latest list of Global Compounders.New names include: Maruwa, Fabrinet, Neurones and WW Grainger. What would you add?Want this in a spreadsheet with FCF, returns on capital and valuations? Check out the link below.ImageSome of the best companies don’t need to reinvest; so they just return excess capital through buybacks.The requirements are less stringent than to be in my investable universe and portfolio. This is just a list of companies that have compounded value over the last 10 years and have a somewhat decent business. They're certainly not a recommendation.
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Here's the latest list of Global Compounders
Here's the latest list of Global Compounders
The top detractors from performance were NVDA and FICO in January 2025
Portfolio at the end of January 2025 January performance: 2.6% FCF ROC = 37% FCF per share CAGR (5yr) = 24% FCF Linearity (5yr) = 0.94 FCF Margin = 35% FCF Margin Expansion (5yr) = 6% FCF Yield = 2.76%There were no outright sales or purchases. The top contributors to performance were KLA Corp $KLA-Tencor(KLAC)$ and Applied Materials $Applied Materials(AMAT)$ . The top detractors from performance were NVIDIA $NVIDIA(NVDA)$ and Fair Isaac $Fair Isaac(FICO)$ .ImageOver the last 15 years, quality investing has crushed value investing.• The MSCI's quality index has an average outperformance of 2.71%, compared to -2.32% for th
The top detractors from performance were NVDA and FICO in January 2025
Fan of high returns on capital?
Fan of high returns on capital?Here's a list of US companies sorted by the minimum their cash ROC was over the last 10 years. In other words, these companies consistently have high returns on capital.Which do you like? $.SPX(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $VeriSign(VRSN)$ $Manhattan Associates(MANH)$ $Domino's Pizza(DPZ)$ $Texas Pacific Land(TPL)$ $MasterCard(MA)$ $Robert Half(RHI)$ $Paychex(PAYX)$
Fan of high returns on capital?
What influences share prices?
What influences share prices? Here’s how I see it.ImageFour of the most important ratios in investing:1. FCF / Invested capital2. FCF / Historic FCF3. FCF / Revenue4. FCF / Market capitalisationIf you had to add one, what would it be?Here's a mental model for thinking about a company's growth:• Is the growth rate high?• Is the growth predictable?High + Predictable = InvestableAnything else = Perhaps best to avoidWhere do you invest?ImageHigh growth companies normally have high multiples.I created this table to show the relationship between growth and multiples👇In short, a PE ratio of 50 requires a 20% earnings growth over 5 years to turn that multiple from 50 -> 20.FYI, I use FCF yield - not P/E.Image
What influences share prices?
Four of the most important ratios in investing
Four of the most important ratios in investing: $.SPX(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $.IXIC(.IXIC)$ $Invesco QQQ(QQQ)$ $NASDAQ 100(NDX)$ $.DJI(.DJI)$ $GLOBAL X DOW 30® COVERED CALL ETF(DJIA)$ 1. FCF / Invested capital2. FCF / Historic FCF3. FCF / Revenue4. FCF / Market capitalisationIf you had to add one, what would it be?High growth companies normally have high multiples.I created this table to show the relationship between growth and multiples👇In short, a PE ratio of 50 requires a 20%
Four of the most important ratios in investing
High growth companies normally have high multiples
High growth companies normally have high multiples.I created this table to show the relationship between growth and multiples👇In short, a PE ratio of 50 requires a 20% earnings growth over 5 years to turn that multiple from 50 -> 20.FYI, I use FCF yield - not P/E. $.SPX(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $.IXIC(.IXIC)$ $NASDAQ 100(NDX)$ $Invesco QQQ(QQQ)$ $.DJI(.DJI)$ $FT Vest U.S. Equity Deep Buffer ETF - January(DJAN)$ ImageTwo things you can do to become a better investor: 1. Limit th
High growth companies normally have high multiples
Here’s a list of some of my favourite non-US companies
Here’s a list of some of my favourite non-US companies:UK 🇬🇧 Cerillion $CERILLION(CER.UK)$ $Cerillion PLC(CRLLF)$ Spirax Sarco $SPIRAX-SARCO ENGINEERING PLC(SPX.UK)$ Sweden 🇸🇪 Fortnox $Fortnox AB(FNOXF)$ Germany 🇩🇪 ATOSS SoftwareNemetschek $Nemetschek AG(NEMTF)$ France 🇫🇷 Esker $Esker SA(ESKEF)$ Denmark 🇩🇰 Genmab $Genmab A/S(GNMSF)$ Novo Nordisk $Novo-Nordisk A/S(NVO)$ Netherlands 🇳🇱 ASML $ASML Holding NV(
The 10-year FCF/share growth rates of the 1,500 largest US companies
Hope you're all having a great weekend.Here are the 10-year FCF/share growth rates of the 1,500 largest US companies. $Paylocity(PCTY)$ $Progress(PRGS)$ $Arista Networks(ANET)$ $Netflix(NFLX)$ $Installed Building(IBP)$ $Albany(AIN)$ $Four Corners Property(FCPT)$ $TopBuild(BLD)$ $Nexstar Broadcasting(NXST)$ $Lumentum(LITE)$ $Onto Inn
The 10-year FCF/share growth rates of the 1,500 largest US companies
Investing in High, Predictable Growth: S&P 500 Insights
Here's how the constituents of the S&P 500 $.SPX(.SPX)$ differ based on their growth rate and the linearity of that growth.I invest in the top right, where growth is high and predictable.ImageWhen analysing a company, consider where its product/service fits in its customer’s income statement. I personally target essential spending, ideally related to OPEX and maintenance CAPEX.ImageTwo things you can do to become a better investor: 1. Limit the number of companies you own 2. Limit how frequently you trade This forces you to: 1. Only own your best ideas 2. Accept there will always opportunities you miss out on
Investing in High, Predictable Growth: S&P 500 Insights
A helpful mental model when analysing a company
Here’s a helpful mental model. When analysing a company, consider where its product/service fits in its customer’s income statement.I personally target essential spending, ideally related to OPEX and maintenance CAPEX.ImageThere are more essential software categories or only CybersecOffice software (eg Microsoft $Microsoft(MSFT)$ ), payroll (ADP $Automatic Data Processing Inc(ADP)$ ), accounting (Intuit $Intuit(INTU)$ ), work force management (ATOSS $Atossa Genetics(ATOS)$ ), enterprise (SAP $SAP SE(SAP)$ , Oracle $Oracle(ORCL)$).
A helpful mental model when analysing a company
What's the highest quality company with a network effect?
What's the highest quality company with a network effect?Here's the list:- Revenue growth higher than FCF growth, suggesting that FCF margin has shrunk.- FCF/share growth not linear over recent years. Of course we expected that with their high CAPEX investments in recent years.- Low return on capital. Only 10% currently. ROC has been quite volatile.- Share count has increased by 5% over the last 5 years due to a 21% SBC/OFC ratio.Hope that helps. Not saying it's not a quality company, just reporting the ratios as I see and calculate them.I put through my list of network companies through my quality filter. $MasterCard(MA)$ rose to the top. $Adobe(ADBE)$ $Autodesk(ADSK)
What's the highest quality company with a network effect?
Four impressive, non-US, linear growth stocks
Here are some very impressive, non-US, linear growth stocks.• 🇨🇦 Descartes Systems $Descartes(DSGX)$ • 🇦🇺 Technology One $TECHNOLOGY ONE LTD(TNE.AU)$ $Technology One, Ltd.(THNOF)$ • 🇧🇪 Lotus Bakeries $Lotus Bakeries NV(LTSSF)$ • 🇬🇧 Diploma $Diploma Plc.(DPLMF)$ Looking for 800 other companies with share price growth just like this? Then subscribe (link in bio) and check out the newly updated linearity database.ImageImageImageImage
Four impressive, non-US, linear growth stocks
Why I don’t invest in the S&P 500？
Why I don’t invest in the S&P 500 $.SPX(.SPX)$ :- only 25% of the index has a FCF/share growth greater than 15%- only 26% of the index has a return on capital greater than 12%- only 12% of the index has both of the above- I don’t want to own banks, airlines, energy companies, mining companies, utilities, heavy industrials and biotechs- I don’t want to own anything discretionary- I don’t want to own alcohol, tobacco or gambling stocks- I don’t want to own anything highly leveraged or highly cyclicalI see companies with high growth rates ahead of them as cheap, and low growth rates ahead of them as expensive.What would you add?
ASML, NVDA, NVO & HESAF - The quality growth dashboards
I've recently updated my quality growth dashboards. Here's a selection featuring:- ASML $ASML Holding NV(ASML)$ Image- NVIDIA $NVIDIA(NVDA)$ Image- Novo Nordisk $Novo-Nordisk A/S(NVO)$ Image- Hermes $Hermes International SA(HESAF)$ ImageI’ve recently updated my Global Compounders Database. You can gain access to a spreadsheet containing ~20 quality growth metrics through my subscriptions (link in bio).I’ve recently added- Salesforce $Salesforce.com(CRM)$ - WW Grainger $W.W. Grainger(GWW)$ - Interactive Brokers
ASML, NVDA, NVO & HESAF - The quality growth dashboards
Here’s a list of companies benefitting from network effects
The network effect is one of the most resilient barriers to entry and one of the hardest competitive advantages to create.Here’s a list of companies benefitting from network effects, sorted by their type of network.Whats your favourite type of network?Payment system $Visa(V)$ $MasterCard(MA)$ $American Express(AXP)$ $PayPal(PYPL)$ $Block(SQ)$ Financial market $Nasdaq(NDAQ)$ $Intercontinental Exchange(ICE)$ E-commerce / Marketplace $Amazon.com(AMZN)$
V, MA & FICO - The companies benefiting from networks effect
The network effect is one of the most resilient barriers to entry and one of the hardest competitive advantages to create.Here are my favourite companies benefiting from networks:• Visa $Visa(V)$• Mastercard $MasterCard(MA)$• FICO $Fair Isaac(FICO)$Fortunately I’m not a value investor! FICO is probably in the top 0.1%, if not 0.01%, of companies in terms of business quality.It’s incredible how many humans use either Facebook, Instagram or WhatsApp.I’m starting to see that $Copart(CPRT)$ more and more in the UK. Compared to a few years ago when I only ever saw it on Fintwit!What would you add?
Here are some very impressive, non-US, linear growth stocks
Here are some very impressive, non-US, linear growth stocks• 🇨🇦 Descartes Systems $Descartes(DSGX)$ • 🇦🇺 Technology One $TECHNOLOGY ONE LTD(TNE.AU)$ $Technology One, Ltd.(THNOF)$ • 🇧🇪 Lotus Bakeries $Lotus Bakeries NV(LOTBY)$ • 🇬🇧 Diploma $Diploma Plc.(DPLMF)$ Over the last 15 years, Descartes Systems Group has grown its share price at an annualised rate of 24% per year. Just as impressive is the fact that it did so with a linearity of 0.93. Linearity refers to how straight a line. Companies with high linearity have a RSq value between 0.9 and 1.0. This means their share pr
Here are some very impressive, non-US, linear growth stocks
Quality companies with linear share price growth and strong financials
Quality companies with linear share price growth and strong financials...Which is your favourite? $Sherwin-Williams(SHW)$ $Marsh & McLennan(MMC)$ $FactSet Research(FDS)$ $Automatic Data Processing Inc(ADP)$ $Home Depot(HD)$ $Masco(MAS)$ $Illinois Tool(ITW)$ $Ametek Inc(AME)$ $MasterCard(MA)$ $Electronic Arts(EA)$ $Rollins(ROL)$
Quality companies with linear share price growth and strong financials
S&P 500 Constituents: Growth Rate and Linearity Differences
Here's how the constituents of the $.SPX(.SPX)$ differ based on their growth rate and the linearity of that growth.ImageImagine being sat around a boardroom table listening to the world's top CEOs talking about the opportunities and threats facing their companies.My latest report covers the recent insights and the economic outlook from a range of quality growth companies...ImageIn 1960, Theodore Levitt warned that the decline of America’s railroad industry was because railroads assumed they were in the "railroad business rather than in the transportation business.” Companies miss out on long-term growth when they fail to see the full spectrum of its customer needs.
S&P 500 Constituents: Growth Rate and Linearity Differences
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