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Strategies & Market Trends : Value Investing
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To: Paul Senior who wrote (75892)7/27/2024 9:20:15 PM
From: E_K_S   of 78683
 
I think you would compare RONTA w/i the same company over time, especially with a new management team. Look at their new capital investments and see if the RONTA increases. If so, management is successful.

Not sure it is easy to compare RONTA for different companies in deferent sectors. Maybe ok for companies in the same sector.

Finally, What about RONTA w/ NWL during Icahn and then after? NWL had a huge move because they increased margins but did they do that from better manufacturing assets or price increases? Did they invest in more efficient tangible assets (w/ the help of Icahn)? It appears so!

MMM +24% the largest one day move in over 30 years. What was the before RONTA then the After?
  1. 3M's recent spin-off of its healthcare unit, Solventum Corporation, indicates that the company is making strategic changes to its business structure. This reorganization could potentially free up resources for investments in other areas, but again, no specific details are provided about manufacturing or R&D investments.
They did spin off SOLV (transferred goodwill and intellectual property & took huge debt off the books) but only moved smaller amount of tangible assets (perhaps a manufacturing facility or two). RONTA s/d be about the same?

I believe the +24% move in MMM is/was due to what management said regarding future growth and their capital investments: Driving sustained organic revenue growth, Increasing operational performance, effectively deploying capital. So maybe it is the 'expectations' that RONTA will be higher in the quarters & years to come.

MMM PE only 10.7x
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I have been using Price/Free Cash Flow especially when looking at REITs. 12x or less is my benchmark (8.3% Free Cash Flow Yield)
perplexity.ai
The inverse of the Price to Free Cash Flow ratio is known as the Free Cash Flow Yield; the higher the better
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