$KLAC Raises an Important Question: How Much Is Quality Worth?
$KLA-Tencor(KLAC)$ is one of the highest quality companies in the S&P 500 $S&P 500(.SPX)$ .
But is it now too expensive?
Many investors pay attention to the wrong variables. Here’s a list of what doesn’t matter, what matters somewhat, and what actually drives returns:
Doesn’t really matter:
•Market cap
•Country company is listed
•Share price
•Dividend yield
Matters somewhat:
•Sector
•FCF yield
•Revenue growth
•Insider ownership / owner operator
Matters the most:
•Return on capital
•Margin expansion
•Pricing power
•Reinvestment runway
What would you add?
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