Conscious Investor Knowledge Base

Search Results for "Return on equity"

1. Can I evaluate every stock using Conscious Investor?
   Warren Buffett says that he can only evaluate a “handful” of stocks and even then only ...and adjustments for such things as poor return on equity, low STAEGR, high debt, recent mergers or t...
2. How does Conscious Investor handle stock splits?
   ...ect the increased number of shares. For example, continuing with the 2-for-1 example, historical dat...will be halved. However, ratios such as return on equity will stay the same. This historical data ...
3. Why do STRET and STRETD always increase when the payout ratio is increased?
   When a company has a high return on equity and return on capital it is generally better that they d...
4. What is the DuPont analysis of return on equity?
   Subscribers to Conscious Investor know that we put a lot of emphasi...ut a lot of emphasis on return on equity. We like it be both high a... Company Ticker Return on Equity Net Profit Mar...
5. How important are dividends?
   ...roying your capital at a faster rate than if you considered both capital gains and dividends. The ... (2) If a company is achieving a high return on equity and return on capital, for the benefit of i...
6. What is the purpose and the effect of a stock split?
   ...ch ranges. Rather it is because of deliberate action of management through stock splits. A stock spl...will be halved. However, ratios such as return on equity will stay the same. Clearly a share split...
7. Why is the debt to equity ratio equal to 0 for banks?
   The Debt/equity ratio is a difficult one to deal with for banks. Even though various websites wil...
8. Why do STRET and STRETD sometimes increase and sometimes decrease when the investment period is increased?
   Consider STRET. The quick answer is that in the short-term, total return as calculated by STRET is heavily influenced by whether the stock is over-priced or under-priced, according to the current PE ...
9. What are STRET and STRETD? How do you calculate them?
   STRET and STRETD provide the answer to the most important question for every investor. This question is, "What returns can I expect on a stock purchase under reasonable assumptions?" You can even cal...
10. What are the main advantages of the STRET/STRETD approach in Conscious Investor?
    The following is a summary of some of the advantages of using STRET and STRETD in Conscious Investor: (1) The Conscious Investor approach using STRET and STRETD provides you with what an investor n...
11. What is the difference between STRET and STRETD?
    Both STRET and STRETD measure the average annual return that you will get on an investment, according to your input variables being met. They can be calculated over any time period before or after ta...
12. How do STRET and TARG work together when buying a share?
    Consider a stock with a current price of $10 and suppose that in the Scenario Analysis page STRET gives an estimated return of $12%. (The STRET calculations are at the bottom of the page on the left ...
13. How do STRET and TARG work together when selling a share?
    ...o sell the stock when the forecast for the return drops to 10%, then enter 10% in the TARG calculations. The outcome will be a figure higher than $10. This is because the lower return will result from...
14. What is the purpose of the Scenario Analysis?
    The Scenario Analysis is also called the What-If Analysis. It enables an investor to answer questions such as, "What if the growth in earnings over the next 5 years is only half what it was over the ...
15. What is the difference between TARG and TARGD?
    ...sure the price that you need to pay to achieve a particular average annual return that you will get on an investment according to your input variables being met. They can be calculated based any time ...
16. What are TARG and TARGD?
    ...that over the prescribed holding period the average total return would be 8 percent per annum based on the current price of the stock. Suppose you wanted a return of 15 percent before you would cons...
17. What are the strengths and weaknesses of Discount Cash Flow DCF methods?
    Discount Cash Flow DCF methods were developed in response to a need, to get more objectivity in determining whether a stock was likely to be a good investment or not. They represent an important land...
18. What level of debt is reasonable?
    Debt is usually measured by the debt to equity ratio. Companies with a high level of debt are risky...panies with a high level of debt are risky for anyone seeking long-term value, since they are vulner...
19. What is the difference between a franchise company and a commodity company?
    ...hise companies and commodity companies. A franchise company is another name for a company with a strong economic moat. In the 1991 Annual report of Berkshire Hathaway, Buffett explains that an economi...
20. How do I use Conscious Investor to determine when to sell?
    The foundation of Conscious Investor is to search for companies with all the signs of an investment that we would anticipate holding for a long time, perhaps even for the rest of our lives. Even th...