Determining
Long-Term Value

Below are key factors that we consider in determining a business’s long-term value:

​

• Long-term competitive advantage (low-cost producer, proprietary intellectual property, patents/trademarks, global brand)

• Business is understandable

• Barriers to entry (i.e. monopolistic or oligopolistic in nature, market share leader)

• Strong management 

• Good returns on invested capital

• Ability to reinvest capital at high rate of return

• Companies that appear to be selling at a discount compared to their intrinsic value

• Great free cash flow

• Minimal capital spending

• Strong balance sheets (tangible/nontangible assets).

• Huge appreciable markets

• High switching cost to go to a competitor

• Buying power and/or pricing power