John Rotonti Jr @JRogrow Twitter profile

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John Rotonti Jr

@JRogrow

8 months

Lift weights, walk a lot outside, eat a healthy whole foods protein-focused diet with lots of fruits and veggies, drink lots of water (and occasional wine), get enough sleep, take care of your mental health, be helpful and compassionate, buy cheap stocks. That’s all I’ve got…

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John Rotonti Jr

@JRogrow

7 months

Below Alliance Bernstein shows that 80% of all ten-baggers were profitable and traded at a NTM P/E of 14-17x. Now Bank of America showing that 80% of a stocks long-term return is driven by the STARTING (GOING IN) valuation. Buffett knows this and pays less than 15x forward...

John Rotonti Jr

@JRogrow

2 years

Profitability matters dearly. Self-funding ability matters dearly. Real true Free cash flow growth matters dearly. Valuation matters dearly…

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John Rotonti Jr

@JRogrow

2 years

From the co-CIO of Bridgewater. Hard to disagree with anything that she says. Absolutely brilliant and fascinating interview...

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John Rotonti Jr

@JRogrow

5 months

ROIC from The Journal of Applied Corporate Finance. You're welcome...

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John Rotonti Jr

@JRogrow

15 days

Absolutely must-read interview with @B3_MillerValue . Genius… “Free cash flow yield is the single best predictor of future rates of return.”

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John Rotonti Jr

@JRogrow

2 years

1. Companies with high ROIC outperform the market by a country mile 2. Companies with rising ROIC outperform the market by light-years To outperform the market over the long-term, buy stock in growing companies that generate high and/or rising ROIC at fair or better valuations

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John Rotonti Jr

@JRogrow

2 months

A P/E of 20-30x has become the new normal for average businesses or slightly above-average businesses and that just means we sit on our hands and wait. Because many of these multiples are just not justified by the math of ROIIC, expected earnings growth, and cost of capital.

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John Rotonti Jr

@JRogrow

2 months

Warren Buffett said when Howard Marks drops a new memo it's the first thing he reads. I do the same when @JohnHuber72 publishes a new report. Here are some quotes from his most recent, but make sure you read his thoughts on Walter Schloss who did 21% annualized over 50 years

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John Rotonti Jr

@JRogrow

8 months

My interview with a true GOAT Joel Tillinghast of @Fidelity . One of the most amazing pieces of investor education I've ever been a part of. You could create a robust Joel Tillinghast Stock Screen from this. He tells you the exact P/E ratio and FCF yields he wants to pay & more

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John Rotonti Jr

@JRogrow

2 years

What is the most undervalued stock in the U.S. that meets this criteria: profitable, FCF generative, ROE of at least 10% and growing? This is not a screen I run but wanted to keep the hurdle low and easy for people to screen for. Only looking for one stock and why it’s cheap. Go

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John Rotonti Jr

@JRogrow

2 years

Required reading on Capital Allocation from the GOAT @mjmauboussin and Dan Callahan. Here are several important quotes and screen shots. I assume all serious investors have devoured this by now! 25 pages of endnotes shows just how well read and hard working they are!👇

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John Rotonti Jr

@JRogrow

3 years

These are two of the most important chart for long-term investors. High ROIC companies outperform over time. And companies with rising ROIC outperform even more. In inflationary times, owning high ROIC businesses is even more important...

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John Rotonti Jr

@JRogrow

11 months

. @pmje73 's interview with @tseides is, without question, one of the best hedge fund investing interviews I've ever come across. Period. Listen to the entire thing at least twice...

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John Rotonti Jr

@JRogrow

11 months

Todd Ahlsten (CIO and PM @Parnassus_Funds and member of the Barron’s Roundtable) explains the semiconductor cycle. He’s invested through 8 cycles now and few on the buyside know the industry as well as him. He’s a stone cold pro…

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John Rotonti Jr

@JRogrow

6 months

Friendly reminder that 80% of all 10-baggers were profitable to start with and traded at a P/E of less than 17x and a P/S of2x…

John Rotonti Jr

@JRogrow

2 years

90% of tech 10-baggers were profitable to begin with and very, very few traded at over 10x sales...

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John Rotonti Jr

@JRogrow

2 years

1995 @mjmauboussin saying that the ROIC-WACC spread (excess return spread) drives EV/IC (a more robust measure of P/B) valuation multiples over time. Also, don't ignore the balance sheet (invested capital) part of the ROIC equation. This should be in everyone's library...

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John Rotonti Jr

@JRogrow

23 days

Intensity is something I think about a lot. Chris Hohn (one of the best to ever do it) is known for carrying around a “quality list” of stocks with his expected 3-5 year IRRs. I think to be great at this you have to be intense. You have to be obsessed. Like Buffett is…

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John Rotonti Jr

@JRogrow

3 months

Hi Rene. FCF is NOPAT minus new invested capital, where invested cap is working cap, capex, and acquisitions. Notice SBC is not added back. The 🐐 @mjmauboussin talks about the flaws of simply doing OCF less capex and other necessary consideration in “One Job”…

Rene Sellmann

@ReneSellmann

3 months

@JRogrow @mjmauboussin What are flawed FCF metrics you most commonly come across John? FCF (including SBC) comes to my mind and so does FCF not adjusted for one-off effects.

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John Rotonti Jr

@JRogrow

1 year

I interviewed Bill Nygren of @HarrisOakmark for the first episode of The JRo Show! I'd be surprised if there is another resource out there that dives as deeply into the research and stock pitch process at Harris Associates. If you enjoy, please retweet🙏

Interview with Bill Nygren

Episode · The JRo Show · Bill Nygren, Chief Investment Officer at Harris Associates, joins The JRo Show to discuss his team's research process. If you’ve ever wanted to know what it’s like to work at...

open.spotify.com

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John Rotonti Jr

@JRogrow

2 years

What’s the most undervalued stock and why? No bs “it’s undervalued bc I think it can grow 30% for ten years and hit a 30% FCF margin”. I mean real mispricing by the market. Thank you

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John Rotonti Jr

@JRogrow

5 months

Ryan Pape was 28 years old when he became CEO of XPEL on Feb 13, 2009 when XPEL's stock was 4 cents per share. Today Ryan is still young, he's still CEO, and XPEL stock is $59. That's a 147,000% return (or 63% annualized).

Interview with XPEL CEO Ryan Pape

Episode · The JRo Show · Business description Business Model Problems solving and value proposition Market share Pricing power and pricing strategy Balance Sheet Income statement and biggest costs/...

open.spotify.com

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John Rotonti Jr

@JRogrow

5 months

"The outstanding[analysts] do a wonderful job of isolating the critical component of each differentiated investment idea. The less outstanding ones will throw a lot of facts at you but will require you [the decision maker] to discover the real core of the investment" - Win Murray

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John Rotonti Jr

@JRogrow

15 days

I really enjoyed reading @DanielSLoeb1 Q2:2024 letter. It covered a lot of ground, but was not too long, and I learned a lot...

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John Rotonti Jr

@JRogrow

11 months

If you are looking for alpha, find companies at an inflection point shifting into a growth phase, early in their profit cycle, with rising ROIC according to @mjmauboussin

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John Rotonti Jr

@JRogrow

12 days

Airbnb has insane economics. Assuming you don't capitalize the intangible investments on the income statement, it has infinite ROIC because it's extremely profitable yet has negative invested cap after subtracting excess cash and NIBCLs (unearned revenue).Thanks @NewConstructs

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John Rotonti Jr

@JRogrow

1 year

Awesome here’s a more obscure one for ya…

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John Rotonti Jr

@JRogrow

1 year

Good write-up by @BillAckman and his team on their investment in Alphabet. They expect “near double digit” top line growth plus significant margin expansion plus large buybacks. That gets us safely to mid-teens expected EPS growth…

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John Rotonti Jr

@JRogrow

8 months

How to run a concentrated portfolio, Bill Nygren style…

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John Rotonti Jr

@JRogrow

2 years

Typical 10-bagger is profitable and has a low starting P/E of 14-17x. I guess valuation does matter…dearly!!!

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John Rotonti Jr

@JRogrow

5 months

Friendly reminder Buffett invested in the five Japanese Trading firms at a P/E of 7x (or a 14% earnings yield) with a growing stream of earnings and dividends...

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John Rotonti Jr

@JRogrow

12 days

This is the best overview of the tech landscape and tech investing I think I've ever come across. Amazing work @GavinSBaker and @patrick_oshag 🙏

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John Rotonti Jr

@JRogrow

8 months

Bill Nygren’s Oakmark Select fund did 43% in 2023 and doesn’t look anything like the Nasdaq. The fund bought Paycom after it crashed 40%, and also bought American Express and Phillips 66! @HarrisOakmark

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John Rotonti Jr

@JRogrow

3 years

Sometimes the market giveth. Volatility is your friend if you have a long-enough time horizon. Sometimes it can be your best friend. By posting this I can't trade any of these stocks for the next three days. You're welcome😉

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John Rotonti Jr

@JRogrow

6 months

Dan Davidowitz of Polen on · His 5 point biz checklist · His 4 criteria for sizing up a position · Why he has his largest position ever (15% in AMZN) · Moats, investment thesis, and bear case at V and MA · Reinforcing competitive advantages and valuation

Interview with Dan Davidowitz of Polen Capital

Episode · The JRo Show · Polen Capital's culture: radical candor, autonomy, mastery, purpose Investing philosophy: competitive advantages, concentrated portfolios (20-25 stocks), position sizing...

open.spotify.com

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John Rotonti Jr

@JRogrow

1 year

Literally people on here talkin buying Trade desk and Datadog meanwhile Buffett buying stocks at less than 15x forward (actually way less) with 90% confidence earnings will be higher in 5y and 50% confidence EPS grows at a CAGR of at least 7%. Different stokes, different folks

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John Rotonti Jr

@JRogrow

28 days

From Slok: The U.S.A has dominant computing power… U.S.A. has at least 10x more data centers than other countries in the world…

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John Rotonti Jr

@JRogrow

2 months

Excellent note on the strength of momentum right now from a 🐐 Bill Nygren @HarrisOakmark

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John Rotonti Jr

@JRogrow

1 year

Few appreciate this math… “An investor who earns 16 percent annual returns over a decade, for example, will, perhaps surprisingly, end up with more money than an investor who earns 20 percent a year for nine years and then loses 15 percent the tenth year.” - Klarman

John Rotonti Jr

@JRogrow

2 years

If you take the best growth investors and the best value investors (or quality growth at a reasonable price investors) I think they end up at the exact same place in 20 years with maybe 15% annualized returns. But the rides will be very different!

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John Rotonti Jr

@JRogrow

6 months

Having conviction in his 5-year out EPS estimates is absoutely central to Buffett's process. To see how important predictability (forcastability) is to Buffett see his letters from 1987, 1992, 1993, 1999, 2000, 2007, 2009, 2013...

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John Rotonti Jr

@JRogrow

4 months

Buffett says valuations are high… “I don’t think anyone at this table has any idea of how to use it [$182 billion in cash] effectively, and therefore we don’t use it…we only swing at pitches we like…today things aren’t attractive.”

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John Rotonti Jr

@JRogrow

7 months

How to estimate mid-cycle normalized earnings and choose the appropriate, justified P/E ratio with Alex Fitch and Michael Nicolas @HarrisOakmark If you are not yet skilled in how to estimate mid-cycle normalized earnigns or you just want to improve your existing skillset👇

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John Rotonti Jr

@JRogrow

11 months

Absolutely. This is from one of the best stock pickers of our generation. Period. But most investors should not traffic here bc they either don’t understand how or make no attempt to adjust for mid-cycle normalized earnings…

C.J.

@CJ0pp3l

11 months

Compounders "hiding" in cyclical end markets or out of favor sectors can represent enormous potential energy. Find great businesses that don't screen well.

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John Rotonti Jr

@JRogrow

1 year

Suits is a great TV show. Extremely underrated.

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John Rotonti Jr

@JRogrow

1 year

About a dozen of you have asked for the free cash flow (FCF) yield slides I mentioned in my appearance on "Talking Billions" with @bogumil_nyc My gift to you...

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John Rotonti Jr

@JRogrow

15 days

Amazon's fundamentals have dramatically improved from 2022-2023 and TTM return on incremental invested capital (ROIIC) was 67%. Notice growth in NOPAT margins. I expect that to continue. Also imagine if it can get its invested cap turns back above 2x. Thanks @NewConstructs

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John Rotonti Jr

@JRogrow

6 months

I appreciate you sharing, but P/Es are driven by ROIC, NOPAT growth, and cost of capital. Domino’s P/E of 30x is justified by the numbers: average ROICs of 50-60% and EVA consistently higher than GAAP net income…

permastonks

@permastonks

6 months

I love pizza. One of the dumbest things I did was not buy dominos at $15 a share years ago. Stop talking about valuation like it mean something over a 20 yr period $dpz. Its 450 a share you think 30 x p/e really mattered over that time frame when initially purchased?

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John Rotonti Jr

@JRogrow

1 month

We underinvested in energy and infrastructure (and housing) for over a decade. This is a very beautiful chart via Torsten Slok...

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John Rotonti Jr

@JRogrow

2 years

Would anyone like to see the 2 hour DCF lecture @AswathDamodaran gave to The Motley Fool Investing team? Professor Damodaran put it up on his YouTube channel. Professor we can't thank YOU enough for your time, your wisdom, your passion, and your humor🙏

Valuation Tools Webcast: From First Principles to Valuation Models

As data access has improved, and our tools get more powerful, valuation practice has devolved into financial modeling, with Excel ninjas viewed as its master...

www.youtube.com

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John Rotonti Jr

@JRogrow

1 month

Amazing and seminal white paper from @mjmauboussin and Dan Callahan on the confusing capital allocation policy of issuing equity and buying back stock to offset the dilution at the same time. I think this will be a report investors talk about for years as this is an acute issue

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John Rotonti Jr

@JRogrow

6 months

In a recent interview (the best I've ever done) Bill Nygren of @HarrisOakmark talked about how buying back lots of stock at low P/Es (high earnigns yields) can give an incredible boost to EPS. To read more about this math I highly recommend @mjmauboussin latest...

John Rotonti Jr

@JRogrow

8 months

This is the best value investing interview I've ever done with a GOAT Bill Nygren. It covers a wide range. Emphasis on low valuation, capital allocation, and governance AND how aligning those 3 (buying back lots of stock at high FCF yields) can drive incredible per-share growth🙏

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John Rotonti Jr

@JRogrow

11 days

META = absolute monster with a 5-year revenue CAGR of 19% while generating 5-year average ROIC of 33%. And notice TTM ROIC of nearly 37% is higher than the 5-year average. Data from @NewConstructs

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John Rotonti Jr

@JRogrow

8 months

I said you could create a Joel Tillinghast screen from our interview b/c he was so specific with the numbers he shared. Here is 1 way to run the screen. This is NOT investment advice. I'm not a master screener, but every number and time frame in this comes from the interview:

John Rotonti Jr

@JRogrow

8 months

My interview with a true GOAT Joel Tillinghast of @Fidelity . One of the most amazing pieces of investor education I've ever been a part of. You could create a robust Joel Tillinghast Stock Screen from this. He tells you the exact P/E ratio and FCF yields he wants to pay & more

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John Rotonti Jr

@JRogrow

2 months

John Neff’s Q2:2024 letter from Akre 🔥🔥🔥 “Satisfying these conditions would require the respective market capitalizations of Apple, Microsoft, and Nvidia to grow from nearly 12% of GDP today to nearly 36% by 2034. Combined…would then equate to 107% of US GDP.”

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John Rotonti Jr

@JRogrow

3 years

One of the most important charts for long-term investors in the stock market...

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John Rotonti Jr

@JRogrow

3 years

Re-read this amazing report from @mjmauboussin this morning before reading Buffett's letter. So a friendly reminder on the ONE job of an equity investor... "The one job of an equity investor is to take advantage of gaps between expectations and fundamentals."

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John Rotonti Jr

@JRogrow

6 months

Entire generation of new investors refuse to learn this math…

David Park

@investingdpark

6 months

@joshtarasoff 🤝 @morganhousel on the importance of longevity @joshtarasoff : “Duration is the force multiplier of all that compounds and the most underrated thing I can think of in the worlds of business and investing. Even the most eye-popping short-term results fade into the

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John Rotonti Jr

@JRogrow

10 months

Industrial Lubricant demand the lowest in over 40 years…

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John Rotonti Jr

@JRogrow

11 months

Nearly everyone I speak to has no idea the amount of “painstaking” hard work required to beat the market over time. There are some that outperformed for 2y during ZIRP that think it’s sustainable. Meanwhile Lee Cooperman is working 17h days at 80y old studying 100s of data pts

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John Rotonti Jr

@JRogrow

5 months

S&P 500 is trading at 29x NORMALIZED earnings compared to the long-term average of 18-20x according to The Leuthold Group (via FMI Q1:2024 letter). This is the 10th decile or "one of the most expensive stock markets on record." This suggests forward 10y annualized returns of 4%

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John Rotonti Jr

@JRogrow

2 years

A friend just asked how to learn about return on invested capital (ROIC). I could have told them to read my article. Instead I said First read “The Little Book that Beats the Market” by Joel Greenblatt and then read absolutely everything @mjmauboussin has ever written. 👇

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John Rotonti Jr

@JRogrow

1 year

Good interview with Joel Tillinghast. He’s done an incredible 13% annualized over 33 years, and their are investors on here with 2.5 years experience who think they can do 20%. Anyway, I digress…Joel looks for below-average P/Es, high FCF yields, and high FCF conversion.👇

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John Rotonti Jr

@JRogrow

3 years

I felt like a genius when I recently added to my Peloton position around $82 (which was a 52-week low at the time). Today I look and feel like a moron. Investing is hard and humbling, which is one reason why I love it so much.

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John Rotonti Jr

@JRogrow

24 days

Joel T is a GOAT 🐐and a legend. I can't recommend his book enough. It's the best pure stock-picking book I've read. Below are 50 of my favorite quotes from his book...

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John Rotonti Jr

@JRogrow

9 months

Even more proof that normalized, sustainable FCF yield is the best predictor of forward rate of return. The time from Wolfe...

John Rotonti Jr

@JRogrow

1 year

About a dozen of you have asked for the free cash flow (FCF) yield slides I mentioned in my appearance on "Talking Billions" with @bogumil_nyc My gift to you...

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John Rotonti Jr

@JRogrow

2 years

What is your favorite dividend stock and why (in three sentences or less)?

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John Rotonti Jr

@JRogrow

2 years

Ted Weschler on reading what others aren’t reading, then connecting the dots, and being extremely selective and only finding ONE great investment opportunity each year where his expectations for a business differ from the market expectations. Be extremely selective, y’all…

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John Rotonti Jr

@JRogrow

8 months

Just as Seth Klarman showed below, one big year of losses can interrupt compounded returns. Ed Easterling from Crestmont shows the math here with these great visuals...

John Rotonti Jr

@JRogrow

1 year

Few appreciate this math… “An investor who earns 16 percent annual returns over a decade, for example, will, perhaps surprisingly, end up with more money than an investor who earns 20 percent a year for nine years and then loses 15 percent the tenth year.” - Klarman

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John Rotonti Jr

@JRogrow

20 days

“Profit cycle hunters.” They aim to invest early in a co’s profit cycle when they think there is a long runway of profitable growth ahead. Then trim/sell when they think that particular profit cycle is coming to an end. One of my favorite interviews ever💯🚀💪👀👇

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John Rotonti Jr

@JRogrow

1 year

Oaktree on homebuilders and the residential real estate market...

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John Rotonti Jr

@JRogrow

7 months

Warren Buffett on the manic FOMO casino… “For whatever reasons, markets now exhibit far more casino-like behavior than they did when I was young. The casino now resides in many homes and daily tempts the occupants.”

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John Rotonti Jr

@JRogrow

3 years

Bill Ackman's slides on Universal Music Group and Domino's Pizza. Thanks so much for sharing your slide deck @BillAckman ...

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John Rotonti Jr

@JRogrow

2 years

My fourth interview with my friend Bill Nygren is the best written interview I’ve ever done with a stock picker. If you want to grow as an investor in 2023, then trust me and read it…

Interview With Value Investor Bill Nygren of Oakmark Funds @themotleyfool #stocks $SCHW $GS $CRM...

Motley Fool analyst John Rotonti recently had the opportunity to discuss stock picking and more with Bill Nygren.

www.fool.com

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John Rotonti Jr

@JRogrow

8 months

Bill Nygren discusses valuation, value traps, optionality, poison pods, corporate governance, why he refuses to forecast above-avg growth past 7y, and why he wants the path of least resistance to be selling a biz that underperforms his expectations...

Looking for the Next Great Value Stock? Don't Start With the Price. Legendary Investor Bill Nygren...

"Buying great businesses at average prices is as much value investing as buying average businesses at great prices. The idea that every business trading at a low P/E, P/B, P/anything ratio is a...

www.fool.com

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John Rotonti Jr

@JRogrow

1 year

Excellent interview. @CliffordAsness manages $100 billion, is probably a certified genius, and is an excellent person to follow on Twitter. Do yourself a favor and read his white papers. Also read this article if u want to know a big difference b/t AQR and Dimensional…

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John Rotonti Jr

@JRogrow

2 years

Incredible work from @CliffordAsness and his team...

John Rotonti Jr

@JRogrow

2 years

I really don't think the market fully realizes how important a value investing discipline will be if the next 10 years look at all different from the last 10 years of ZIRP, QE infinity, fiscal stimulus infinity, & massive Fed put. Cost of capital is now 10%. Insist on a MOS y'all

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John Rotonti Jr

@JRogrow

9 months

In the 4th episode @ChrisBloomstran shares · Exactly what he reads/pods he listens to · How he’s conditioned his workflow around ValueLine & Bloomberg · Granular detail around his portfolio metrics and why it's cheap · His expertise on Buffett’s stockpicking & Berkshire Hathaway

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John Rotonti Jr

@JRogrow

2 years

Twilio and Atlassian down over 30%. Cloudflare down 20%. Lesson: extreme valuations don’t typically reset after 1 or 2 quarters. Extreme valuations can take a while to fully come down to earth from the stratosphere. Just because a stock is down 70% doesn’t mean it’s undervalued

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John Rotonti Jr

@JRogrow

11 days

KKR...

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John Rotonti Jr

@JRogrow

8 months

“Crisply put, you want low P/E stocks that are also high quality and growing, with a high degree of certainty about the long-term outlook.” - Joel Tillinghast

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John Rotonti Jr

@JRogrow

2 years

This is one of the most important interviews you’ll read from three investors that studied under Chuck Akre for a decade…

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John Rotonti Jr

@JRogrow

3 months

According to @NewConstructs CME Group’s ROIC has increased for 5 consecutive years and it generated 5y avg return on tangible invested capital of 60%, FCF conversion of 116%, & FCF margins of 58% (higher than Visa’s 5y avg👀👀👀). And it’s on @mjmauboussin list of wide moat Biz

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John Rotonti Jr

@JRogrow

11 months

Bill Nygren on valuation discipline: “Our analysts model…for the next two years and then apply a growth rate for the next five years, giving us a seven-year forecast. If a stock can’t grow into a below-market P/E ratio in that time, we aren’t likely to consider owning it.”

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John Rotonti Jr

@JRogrow

2 years

Some brilliant investors are calling for 10 yrs of sideways stock markets. I have zero clue about that. But, if it hypothetically plays out that way, why would you not want a portfolio of highly resilient, profitable, attractively valued, Dividend GROWTH stocks? Get paid to wait

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John Rotonti Jr

@JRogrow

1 year

Some people think I'm just trying to sound contrarian. No, I understand the math of NOPAT, invested capital, ROIC, and valuation (and I have a point of view on what's cheap, what types of businesses the world needs, and what type of investments I think win in this environment)

John Rotonti Jr

@JRogrow

2 years

I’ve said it before I love capital intensive companies that generate high ROIC. Keep an eye out for companies that have high ROIC but nowhere to reinvest so invested capital is not growing and organic revenue growth is anemic. In this case management must excel at cap allocation

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John Rotonti Jr

@JRogrow

3 years

Stocks have historically increased 75% of the time, but you have to hold on for the ride. This is one of the most important visuals for long-term investors...

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John Rotonti Jr

@JRogrow

1 year

Just so beautiful and awesome on ROIC from the GOAT @mjmauboussin and his long-time collaborator Dan Callahan. Not immediately reading what Mauboussin published is sort of like not nurturing your soul. Get ready for 17 screenshots👇

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John Rotonti Jr

@JRogrow

3 years

Expectations Investing by Al Rappaport and @mjmauboussin is the best investing book I’ve ever read. I’ve got two copies😉😜💪

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John Rotonti Jr

@JRogrow

7 months

“Bob owns no stock and when I say no stock I mean no stock. He owns $15 million and we’ve got $3 billion invested, and I don’t mean funny money with options.” -Nelson Peltz on CNBC right now

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John Rotonti Jr

@JRogrow

6 months

Dan Davidowitz on valuation: "The way we think about valuation is: what is the expected return on this company over the next five years given the combination of earnings growth we expect and likely multiple compression?"

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John Rotonti Jr

@JRogrow

1 month

Polen Focus Growth Q2:2024 letter says Nvidia and other hardware winners could still be intensely cyclical…

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John Rotonti Jr

@JRogrow

5 months

🔥🔥🔥John Neff at Akre wonders whether the stock market is actually “broken”…🔥🔥🔥 “Given the tidal shift from active to passive investing, it follows that today’s investors are being instructed rather than served by the stock market to an unprecedented extent.”

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John Rotonti Jr

@JRogrow

2 years

If you don’t get NOPAT and Invested Capital right, then you can’t get free cash flow (FCF), return on invested capital (ROIC), and economic profit (EVA) right. FCF = NOPAT - incremental invested capital ROIC = NOPAT/average invested cap EVA = NOPAT - (invested cap x WACC)

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John Rotonti Jr

@JRogrow

2 years

Three incredible stats about Domino's from @NewConstructs : (1) DPZ has a TTM ROIC of 59% (2) DPZ has a 5-yr average ROIC of 60% (3) Only four other companies in the S&P 500 have a higher 5-year average ROIC than Domino's I'm long 4 of the 5 companies including $DPZ...

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John Rotonti Jr

@JRogrow

1 year

Greenblatt says he prefers some tangible assets to go along with high ROIC... “If it’s asset light you can’t reinvest much, so I’d rather have a business that can reinvest at 20% or 30% [ROTIC] forever rather than something that can earn 100% [ROTIC] but doesn’t need any money.”

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John Rotonti Jr

@JRogrow

11 months

This is what happens when you're buying stocks at 40% normalized FCF yields. But, hey, the "growth at any cost" crowd is going to do what it's going to do. Huge congrats to Dan Lysik @MillerValue

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John Rotonti Jr

@JRogrow

8 months

"A company with a low P/E will on average have less downside than a high P/E because it can return more cash by dividends and buybacks." - Joel Tillinghast That great quote from Joel Tillinghast is partly brought to life with the visual from Ed Easterling at Crestmont...

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John Rotonti Jr

@JRogrow

1 year

Broad Run was founded by some of the best investors I'm aware of. They've owned Alphabet since 2011. Here are screen shots from their recent deep dive. Q2 letter also goes into detail on the 3 antitrust cases against Google and Alphabet's competitive positioning re AI and LLMs

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John Rotonti Jr

@JRogrow

3 years

Zoom Video has net cash of $5.334 billion, total assets of $7.551 billion, and a market cap of $36.239 billion. So net cash makes up about 71% of total assets and about 15% of market cap. It also generates over $1 billion in annual FCF.

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John Rotonti Jr

@JRogrow

1 month

Electrification of everything from Capital Group…

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John Rotonti Jr

@JRogrow

8 months

This is the best value investing interview I've ever done with a GOAT Bill Nygren. It covers a wide range. Emphasis on low valuation, capital allocation, and governance AND how aligning those 3 (buying back lots of stock at high FCF yields) can drive incredible per-share growth🙏

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