We’ve created a new Model Portfolio, one that only includes those companies that not only receive our Very Attractive rating, but also tie executive compensation to return on invested capital (ROIC).
The financial media may focus its attention on earnings per share and a variety of non-GAAP metrics that companies selectively provide, but sophisticated investors know the truth; ROIC is the primary driver of shareholder value creation.
All 15 stocks in this portfolio should benefit from executive focus on ROIC. In addition, by including only companies with strong businesses and cheap valuations, we give investors a margin of safety and the potential for outsized returns.
*This report is free to all Platinum or higher members.Photo Credit: Lendingmemo.com (Flickr)