Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: petal who wrote (77906)	8/19/2025 5:21:09 AM
From: petal	Read Replies (1) \| Respond to of 78513

I have now created a spin-off group, which will mainly deal with upcoming US (and perhaps other) spins: Subject 60456 Found an existing (hibernating) spin-off group too: Subject 16730 Will make an attempt to revive that one as well. If you're interested in spin-offs, join both groups, why don't ya!

To: petal who wrote (77906)	8/19/2025 7:15:59 AM
From: Elroy	Read Replies (2) \| Respond to of 78513

Buy a basket of the 20-30 co.'s with has the highest ROIC and lowest EV/EBIT. This sounds interesting, but one thing I've never understood about this type of investing is the following: Say you examine 500 companies, and you choose the 10 with the highest ROIC and lowest EV/EBIT. Then the last one to enter your "group of 10" has a share price increase. It is now 11th out of the 500 companies, and a stock which you don't own used to be 11th but is now 10th. What do you do? You no longer own the 10 companies that best fit your metrics, you own 1-9 and #11. Do you sell the stock which appreciated in value to make it #11 and buy the new #10? If so, what if the share price appreciation (the next day) of this now #11 ranked stock goes right back down to where the stock is #10 again, but you sold it because it moved out of the top ten to 11. Do you buy it back? In other words, I see how you can put on the portfolio, but as the stock prices in your "best metrics" portfolio changes, when exactly do you buy / sell to adjust for the portfolio changes?

To: petal who wrote (77906)

8/19/2025 10:37:12 AM

From: bruwin

Read Replies (2) | Respond to of 78513

You may want to consider using AI's such as DEEPSEEK, GROK, PERPLEXITY to find the answers you are looking for, if you don't already use them.

Here's the reply that DEEPSEEK gave me to answer the question in your Item (2), namely "FIND 20 COMPANIES ON THE NYSE WHO HAVE BOTH THE HIGHEST ROIC AND EV/EBIT" ----->

"Methodology & Important Disclaimer

Data is Dynamic: Stock prices and financial metrics change daily. The following list was compiled based on recent data, but it is a snapshot in time, not a permanent ranking.
Screening Criteria: To create this list, we looked for NYSE-listed companies with:
- ROIC: Generally above 20% (many are significantly higher).
- EV/EBIT: Generally above 25x (signaling high market expectations).
- Market Cap: Focus on large, established companies to ensure data reliability.
This is not investment advice. These companies are often priced for perfection. Any stumble in growth or profitability can lead to a significant correction in their stock price.

20 NYSE Companies with High ROIC and High EV/EBITHere is a list of 20 companies that exemplify the combination of exceptional quality and high valuation.

Company Name - Ticker - Sector - Why it Fits (High ROIC Driver)

1. Mastercard Inc.	MA	Financial Services	Incredible capital-light network model. High fees on a massive volume of transactions.
2. Visa Inc.	V	Financial Services	Similar to Mastercard. A dominant global payments network with phenomenal margins.
3. Microsoft Corporation	MSFT	Technology	Dominant software (Windows, Office), high-margin cloud (Azure), and strong enterprise lock-in.
4. Apple Inc.	AAPL	Technology	Premium brand power, immense pricing power, and a hugely profitable ecosystem (iPhone, Services).
5. Alphabet Inc. (Google)	GOOGL	Communication Services	Near-monopoly in search advertising (Google) and a leader in cloud (GCP) and video (YouTube).
6. Meta Platforms, Inc.	META	Communication Services	Massive scale in social media (Facebook, Instagram, WhatsApp) driving incredibly profitable ads.
7. Adobe Inc.	ADBE	Technology	Dominant creative software (Photoshop, Illustrator) with a highly successful subscription model.
8. Intuit Inc.	INTU	Technology	Dominates small business (QuickBooks) and tax (TurboTax) software with strong recurring revenue.
9. Automatic Data Processing	ADP	Industrials	Leading payroll processing provider. Benefits from high switching costs and recurring revenue.
10. S&P Global Inc.	SPGI	Financial Services	Dominant credit rating agency and index provider. Essential, high-margin, and hard to disrupt.
11. Moody's Corporation	MCO	Financial Services	Duopoly with S&P in credit ratings. possesses immense pricing power and a wide moat.
12. Sherwin-Williams Co.	SHW	Basic Materials	Leading paint manufacturer with a powerful brand and a vast, company-owned retail network.
13. Pool Corporation	POOL	Industrials	The largest wholesale distributor of swimming pool supplies. A niche leader with high margins.
14. Colgate-Palmolive Co.	CL	Consumer Defensive	Powerful global consumer brands that generate consistent, high-margin cash flows.
15. The Estée Lauder Co.	EL	Consumer Defensive	Luxury brand portfolio with tremendous pricing power and global appeal.
16. Nike, Inc.	NKE	Consumer Cyclical	One of the world's strongest brands. Drives high margins through brand loyalty and innovation.
17. Thermo Fisher Scientific	TMO	Healthcare	Leader in life sciences tools and diagnostics. Benefits from recurring revenue and innovation.
18. Stryker Corporation	SYK	Healthcare	Leading medical technology company. High R&D creates innovative products with premium pricing.
19. TransUnion	TRU	Industrials	One of the three major credit bureaus. Benefits from a vital role in the economy and deep data moats.
20. Verisk Analytics, Inc.	VRSK	Industrials	Provides data analytics and risk assessment to insurance and other industries. High switching costs.

Key Observations and Common Themes: Companies that achieve this elite status almost always share a few critical characteristics that create their "moat":

Network Effects: (Visa, Mastercard, Meta) The value of the service increases as more people use it, creating a virtually unassailable position.
Intangible Assets: (Apple, Nike, Estée Lauder) Powerful brands and patents that allow for premium pricing and customer loyalty.
Cost Advantages: (Adobe, Microsoft) Often through software, where the cost to produce one more unit is nearly zero, leading to incredible scalability.
High Switching Costs: (ADP, Salesforce) It is so difficult or expensive for a customer to switch to a competitor that they are effectively "locked in."
Efficient Scale: (S&P, Moody's) The market is effectively served by a very small number of firms, making it unattractive for new competitors to enter.

In summary, you have asked for a list of some of the most successful and richly valued companies in the world. They are excellent case studies for understanding competitive advantages, but their high valuations mean an investor must have strong conviction in their future growth to justify buying at current prices."