Buffett values companies with a high return on invested capital from "summary" of The Warren Buffett Portfolio by Robert G. Hagstrom
Warren Buffett has a keen eye for companies that generate high returns on their invested capital. This metric serves as a crucial factor in his investment decisions, as it reflects a company's ability to efficiently generate profits from the capital it has invested. Companies with a high return on invested capital typically indicate a competitive advantage or a strong business model that allows them to generate substantial profits with minimal capital expenditure. Buffett's focus on high return on invested capital is rooted in his belief that a business's ability to generate strong returns on its invested capital is a key driver of long-term value creation. By investing in companies with a high return on invested capital, Buffett is essentiall...
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