You may be aware of how difficult it is for fund mangers to outperform stock indexes. And now all investors face the challenge of a slowing economy as the Federal Reserve tightens monetary policy to cool the U.S. economy and clamp down on inflation.
ROIC sheds light on a corporate management team’s ability to make the most efficient use of the money invested to fund its business. For a top-down approach, there is no need to make fair comparisons. Looking back 10 years , ROIC data is available for 453 members of the S&P 500. The table includes 10-year total returns for the stocks, with dividends reinvested. Of the 20 companies, all but four have beaten the S&P 500’s 10-year return of 242% through Aug. 31.
Looking ahead: ratings and price targets Sell-side analysts tend to avoid placing negative ratings on stocks. One reason is that bad news or a long decline for a company may already be “baked into” its share price.