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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