Latest news with #profits
Yahoo
14 hours ago
- Business
- Yahoo
3 things Warren Buffett looks at when hunting for shares to buy
The investment track record of billionaire stock-picker Warren Buffett is incredible. But his approach to buying and holding shares in large, proven, well-known companies is in fact a fairly simple one. Like many private investors, some of what I do myself is inspired by Buffett, albeit on a much smaller scale. Here are three things Buffett considers when looking at shares. Even a good business can have a bad year and swing from a profit to a loss. Over the long run though, Buffett's interest has mostly been in buying shares in companies that have already proven themselves profitable and look set to keep generating profits consistently. That means it is important to understand how a business works. It is also important to get to grips with its financial situation. For example, a company can be profitable at the operating level but so laden with debt that it loses money overall. So it is important to understand what a business does, how that makes money, and whether making money operationally means the company can make money overall. Buffett sticks to what he knows when investing – he calls this his 'circle of competence'. In his opinion, it is unimportant how wide or narrow an investor's competence circle is. The important thing is that they recognise it and avoid the temptation to stray beyond it. Buffett has invested in plenty of capital-intensive industries that need new equipment on a regular basis, from power stations to train lines. But, by contrast, a lot of the shares he has bought are in companies that are able to 'sweat their assets' long after they have been paid for. Coca-Cola (NYSE: KO) is a good example. The soft drinks maker has spent decades investing heavily in building its brands. Sales today are benefitting from investments the company made decades ago. In fact, even if Coca-Cola never spent another penny on marketing, I think its brands would retain substantial appeal for consumers for decades to come. The economics of such a business can be appealing, because they are not heavily reliant on large, recurring capital expenditure. Buffett sometimes watches a company for decades before investing in it. With others, such as Coca-Cola, he builds a stake then does nothing. Buffett remains a large investor in the business – but he has not bought a single Coca-Cola share since the 1990s. The master investor still holds a large Apple stake – but has sold a lot of Apple stock over the past couple of years. Why? We do not know for sure. But what is clear is that Buffett does not just want to buy into great businesses – he wants to do so at an attractive share price. Coca-Cola shares are far costlier now than when Buffett bought his. But the company faces more competition, from niche start-ups to a tidal wave of drinks that emphasise their health benefits compared to sugary sodas. That is a risk to Coca-Cola's future profitability. Like Buffett, I think Coca-Cola has a very strong business – but have no plans to invest at its current share price. The post 3 things Warren Buffett looks at when hunting for shares to buy appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool C Ruane has no position in any of the shares mentioned. The Motley Fool UK has recommended Apple. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025
Yahoo
17 hours ago
- Business
- Yahoo
Has NWF Group plc (LON:NWF) Stock's Recent Performance Got Anything to Do With Its Financial Health?
NWF Group's (LON:NWF) stock is up by 3.1% over the past week. Given that stock prices are usually aligned with a company's financial performance in the long-term, we decided to investigate if the company's decent financials had a hand to play in the recent price move. In this article, we decided to focus on NWF Group's ROE. Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. Put another way, it reveals the company's success at turning shareholder investments into profits. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. The formula for return on equity is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for NWF Group is: 9.3% = UK£8.0m ÷ UK£86m (Based on the trailing twelve months to November 2024). The 'return' is the amount earned after tax over the last twelve months. Another way to think of that is that for every £1 worth of equity, the company was able to earn £0.09 in profit. Check out our latest analysis for NWF Group We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features. At first glance, NWF Group's ROE doesn't look very promising. Yet, a closer study shows that the company's ROE is similar to the industry average of 9.7%. Having said that, NWF Group has shown a modest net income growth of 10% over the past five years. Considering the moderately low ROE, it is quite possible that there might be some other aspects that are positively influencing the company's earnings growth. Such as - high earnings retention or an efficient management in place. As a next step, we compared NWF Group's net income growth with the industry and were disappointed to see that the company's growth is lower than the industry average growth of 28% in the same period. Earnings growth is an important metric to consider when valuing a stock. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Has the market priced in the future outlook for NWF? You can find out in our latest intrinsic value infographic research report. With a three-year median payout ratio of 36% (implying that the company retains 64% of its profits), it seems that NWF Group is reinvesting efficiently in a way that it sees respectable amount growth in its earnings and pays a dividend that's well covered. Moreover, NWF Group is determined to keep sharing its profits with shareholders which we infer from its long history of paying a dividend for at least ten years. Upon studying the latest analysts' consensus data, we found that the company is expected to keep paying out approximately 40% of its profits over the next three years. Overall, we feel that NWF Group certainly does have some positive factors to consider. That is, a decent growth in earnings backed by a high rate of reinvestment. However, we do feel that that earnings growth could have been higher if the business were to improve on the low ROE rate. Especially given how the company is reinvesting a huge chunk of its profits. On studying current analyst estimates, we found that analysts expect the company to continue its recent growth streak. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
17 hours ago
- Business
- Yahoo
Has NWF Group plc (LON:NWF) Stock's Recent Performance Got Anything to Do With Its Financial Health?
NWF Group's (LON:NWF) stock is up by 3.1% over the past week. Given that stock prices are usually aligned with a company's financial performance in the long-term, we decided to investigate if the company's decent financials had a hand to play in the recent price move. In this article, we decided to focus on NWF Group's ROE. Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. Put another way, it reveals the company's success at turning shareholder investments into profits. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. The formula for return on equity is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for NWF Group is: 9.3% = UK£8.0m ÷ UK£86m (Based on the trailing twelve months to November 2024). The 'return' is the amount earned after tax over the last twelve months. Another way to think of that is that for every £1 worth of equity, the company was able to earn £0.09 in profit. Check out our latest analysis for NWF Group We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features. At first glance, NWF Group's ROE doesn't look very promising. Yet, a closer study shows that the company's ROE is similar to the industry average of 9.7%. Having said that, NWF Group has shown a modest net income growth of 10% over the past five years. Considering the moderately low ROE, it is quite possible that there might be some other aspects that are positively influencing the company's earnings growth. Such as - high earnings retention or an efficient management in place. As a next step, we compared NWF Group's net income growth with the industry and were disappointed to see that the company's growth is lower than the industry average growth of 28% in the same period. Earnings growth is an important metric to consider when valuing a stock. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. Has the market priced in the future outlook for NWF? You can find out in our latest intrinsic value infographic research report. With a three-year median payout ratio of 36% (implying that the company retains 64% of its profits), it seems that NWF Group is reinvesting efficiently in a way that it sees respectable amount growth in its earnings and pays a dividend that's well covered. Moreover, NWF Group is determined to keep sharing its profits with shareholders which we infer from its long history of paying a dividend for at least ten years. Upon studying the latest analysts' consensus data, we found that the company is expected to keep paying out approximately 40% of its profits over the next three years. Overall, we feel that NWF Group certainly does have some positive factors to consider. That is, a decent growth in earnings backed by a high rate of reinvestment. However, we do feel that that earnings growth could have been higher if the business were to improve on the low ROE rate. Especially given how the company is reinvesting a huge chunk of its profits. On studying current analyst estimates, we found that analysts expect the company to continue its recent growth streak. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Independent
2 days ago
- Business
- The Independent
Who is eligible for Nationwide's £100 bonus payment
Nationwide will distribute a £100 'Fairer Share' payment to over four million eligible members in 2025, up from 3.85 million last year, costing the building society £400 million. To qualify for the payment, members must use Nationwide for everyday banking and hold a qualifying savings or mortgage product; payments will be made between June 18 and July 4. The payment follows Nationwide 's 30 per cent jump in annual profits, driven by the takeover of Virgin Money and a focus on competitive interest rates. Nationwide CEO Debbie Crosbie reported a record £2.8 billion returned to members and the highest ever growth in mortgage lending and retail deposit balances. Following the £2.9 billion acquisition of Virgin Money, Nationwide has no immediate plans for job cuts and will maintain Virgin Money 's Newcastle headquarters, but long-term impacts on staff are still under review.
Yahoo
2 days ago
- Business
- Yahoo
2 Profitable Stocks Worth Investigating and 1 to Think Twice About
A company with profits isn't always a great investment. Some struggle to maintain growth, face looming threats, or fail to reinvest wisely, limiting their future potential. A business making money today isn't necessarily a winner, which is why we analyze companies across multiple dimensions at StockStory. That said, here are two profitable companies that leverage their financial strength to beat the competition and one best left off your watchlist. Trailing 12-Month GAAP Operating Margin: 24% Addressing the demand for aesthetically-pleasing and unique outdoor living spaces, Trex Company (NYSE:TREX) makes wood-alternative decking, railing, and patio furniture. Why Do We Think Twice About TREX? 5.4% annual revenue growth over the last two years was slower than its industrials peers Capital intensity has ramped up over the last five years as its free cash flow margin decreased by 3.9 percentage points Diminishing returns on capital suggest its earlier profit pools are drying up Trex's stock price of $56.42 implies a valuation ratio of 25.5x forward P/E. If you're considering TREX for your portfolio, see our FREE research report to learn more. Trailing 12-Month GAAP Operating Margin: 18.1% With low-pressure heating systems as the first product, Trane (NYSE:TT) designs, manufactures, and sells HVAC and refrigeration systems, the former to commercial and residential building customers and the latter to commercial truck manufacturers. Why Is TT a Good Business? Annual revenue growth of 11.6% over the past two years was outstanding, reflecting market share gains this cycle Share buybacks catapulted its annual earnings per share growth to 23.7%, which outperformed its revenue gains over the last two years Stellar returns on capital showcase management's ability to surface highly profitable business ventures, and its rising returns show it's making even more lucrative bets Trane Technologies is trading at $430.30 per share, or 33.1x forward P/E. Is now the right time to buy? Find out in our full research report, it's free. Trailing 12-Month GAAP Operating Margin: 28.2% Pioneering minimally invasive surgery since its first da Vinci system was FDA-cleared in 2000, Intuitive Surgical (NASDAQ:ISRG) develops and manufactures robotic-assisted surgical systems that enable minimally invasive procedures across various medical specialties. Why Should ISRG Be on Your Watchlist? System Placement averaged 11.8% growth over the past two years and imply healthy demand for its products Sales outlook for the upcoming 12 months implies the business will stay on its desirable two-year growth trajectory Earnings growth has easily exceeded the peer group average over the last five years as its EPS has compounded at 12.3% annually At $555.52 per share, Intuitive Surgical trades at 66.3x forward P/E. Is now the time to initiate a position? See for yourself in our comprehensive research report, it's free. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
