1YPEG gives us an idea of the growth rate over time - is the company improving and how fast? What is the slope of the curve?
The given calculation with ROIC seems more like a snapshot in time, true? I can’t say if ROIC itself is better or supplementary or what, but let’s say it’s interesting, would it make more sense to see if ROIC is improving over time or not?
Lastly the calcluated PE/ROIC figures for CELG and CRTO are incorrect. CELG should be 3.2 (not 1.5) and CRTO should be 2.9 (not 2.2). Cheers.
How odd! I don’t ever use ROIC or PE/ROIC, but I have already exited the three companies with the highest PE/ROIC ratios (FB, SNCR, PSIX, at 5.9, 5.2, 4.8), and only those three. And my largest position, SWKS, has the lowest ratio (0.9). I wonder if that means something?
Saul
Oops CELG was correct, my spreadsheet turned 19 into 9 somehow, sorry.
(All ROIC from Morningstar (e.g. http://financials.morningstar.com/ratios/r.html?t=AAPL and I used the TTM value)
AAPL PE 16, ROIC 31%, PE/ROIC .5.
GILD PE 12, ROIC 55%, PE/ROIC .2.
AMZN ROIC is -1%.
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