re RONTA stuff: Yes, I see that about NVDA: : "high RONTA's but growing revenues were not due to their tangible asset holdings. Both outsource their manufacturing . . ." Return on tangible equity now at roughly 142%, which is much higher than 24% last year and 65% the year before. If a person bought NVDA in 2023 because of its low RONTA compared to previous years, and hoped/expected RONTA would go up in 2024 and take the stock up as well, yes the stock has risen, congratulations on having a winning stock...even if you did imo, maybe buy it for the wrong reason (low RONTA). Conversely and rhetorically, with a very high, historically high RONTA now, would/should the person now sell NVDA?
I like BLDR and hold a position. It has negative tangible book value, so maybe RONTA analysis not applicable.
I see one aspect with RONTA (and with some other metrics used for analyses also):
I'd like to see a criterion. -- what is a high RONTA for the company, what is low RONTA? Do I compare a company's RONTA to itself or with other companies in its sector? In other words, what is it about a company's RONTA that would cause me to become interested in it, especially if it adds a level of interest or any new interest that other metrics I use don't already show and give me a clue as to whether I want to buy/sell/avoid the stock. |
