Posts Tagged ‘EVA’

The goal of ValueAligned investing is to identify companies with incentive systems that motivate value creating behavior, and to find those companies that either have, or are moving toward, systems that motivate profitless, value destroying growth.  In a new paper (here) compensation consultants and EVA experts Steve O'byrne and David Young, offer investors a guide on

BERK: HT fellow Stern Stewart alum, Patrick Furtaw of SCCO International for identifying our latest ValueAligned bank now officially on the ValueAligned watch list. The Royal Bank of Scotland will ask shareholders to approve a new long-term incentive plan where economic profit growth (EVA growth) is an important (if not overarching performance metric) to determine performance related pay.  The plan also contains performance-vesting deferred shares and clawbacks that assure that short-term EVA growth is

Grocer giant Whole Foods (WFMI) reported its first quarter results Tuesday, easily beating out analyst estimates for the quarter. As we noted in our earnings preview for Whole Foods, analysts had forecast that the company would be announcing that it earned 26 cents per share during the quarter. Actual results were much stronger, at a reported 32 cents per share. During the same period last year the company had earnings of 20 cents

"There's a million ways you can adjust your earnings per share," said Jack Cieselski, publisher of the Accountant's Analyst Observer, a trade journal. "It's no revelation that companies can come to a desired earnings figure. [The study's authors] have pretty good circumstantial evidence that this does happen."

BERK: ExxonMobil (XOM) has been criticized for its "lack" of investment spending even though it spent $26 billion on capital projects last year. (I know-$26 billion is nothing compared to the amounts governments can spend, but it's a bunch of money to the rest of us).  XOM is a ValueAligned company, and consequently, it has a high hurdle rate and tough criteria for any spending that is expected to have future benefits.  WIth that amount

Money managers ignored economic profitability and bought stocks that dropped the most in the credit crisis, leaving opportunities for value investors in 2010.  Smart managers are buying this year’s laggards, betting companies with the highest EVA  will be rewarded as the Federal Reserve prepares to raise interest rates and the government removes stimulus.

BERK:  Home appliances have suffered like home furnishings for the last three years as demand for everything in the house has cratered.  It is one of the reasons Sears Holdings' Sears stores have been suffering.  After all, Sears is the largest appliance seller in the US. Appliances have always been a source of traffic, interest and merchandising opportunities. In our town in NJ we have had as long as I can remember - 40 years or so - a

John S. Shiely continues to expand a turnaround at Briggs & Stratton Corp. that was begun by integrating a business philosophy based on Economic Value Added (EVA). The essential principle of EVA analysis is that a company only makes economic profit if the company earns more than the cost of its capital. The results: EVA has helped the company achieve an impressive record of producing economic profits. Briggs & Stratton has made money every year since the late 1980s.

Imagine that - recognizing that the freedom to create value through emergent associations among business constiutiencies - employees, suppliers,customers, communities, lenders and shareowners - just might be the most enlightened way for humans to manage scarce resources.  Now if the government and interest groups would also attend these conferences maybe they would see

Today at the Bank of America Securities Merrill Lynch Industrials Conference Marie Z. Ziegler, VP of Investor Relations for Deere (DE, $52.40) made three observations about her company: 1. Favorable macroeconomic tailwinds in Deere's agriculutural businesses.  DE is getting popular in places where incomes are relatively low but growing fast.  And as populations earn more, they tend to upgrade their diets.  "If you are going to eat chicken, it takes four times the amount of grains to produce an equivalent amount