Will Beta

Main Menu

  • Volatility
  • Systematic Risk
  • Returns Of Assets
  • Beta Data
  • Finance Debt

Will Beta

Header Banner

Will Beta

  • Volatility
  • Systematic Risk
  • Returns Of Assets
  • Beta Data
  • Finance Debt
Returns Of Assets
Home›Returns Of Assets›Why Tatton Asset Management’s Strengths Could Help It Weather Economic Uncertainty

Why Tatton Asset Management’s Strengths Could Help It Weather Economic Uncertainty

By Rogers Jennifer
July 8, 2022
0
0
Item Picture

The best companies resist competitive threats year after year, while their competitors fail. This cycle of constant outperformance and reinvestment can lead to incredible compounding returns, especially during times of global economic uncertainty.

What makes these companies different is that they have what billionaire investor Warren Buffett calls economic moat.

Defensive moats allow companies to generate outsized profits over long periods of time. They can be an investment goldmine. And while these stocks may be hard to come by, there are signs that Tatton Asset Management (LON:TAM) may be one of them.

Before we start explaining why it looks like a high-quality business, here are some of the main ways a business can build a strong moat around itself:

  • Large scale – Composed of large infrastructures and distribution networks
  • Intangible assets – Such as trademarks, patents or regulatory approvals
  • Network effects – When customers are part of a product
  • Cost advantages – Achieved through superior processes and unique locations and assets
  • Change costs – It may be too expensive or complicated for customers to leave
Get insights based on data in LON:TAM

Economic swing of Tatton Asset Management (LON:TAM)

When it comes to researching companies with moats, some of the biggest clues are actually found in their financial statements. By examining a small number of important ratios, you can get an idea of ​​a company’s competitive strength and profit capacity.

Here’s what they are and why they’re important – and how Tatton Asset Management stands against them:

  1. High free cash flow rates – the measure of a successful business.
    – A high ratio of free cash flow to turnover can be a very positive sign. For Tatton Asset Management, the figure is an impressive 45.5%.
  2. High return on capital employed – the measure of an efficient and profitable growing business.
    – An average ROCE over 5 years of more than 12% is an indicator of strong efficiency. For Tatton Asset Management, the figure is an impressive 37.0%.
  3. High return on equity (compared to its peers) – the measure of a company making good profits on its assets.
    – Tatton Asset Management has an average ROE over 5 years of 35.2%.
  4. High operating margins (compared to its peers) – the measure of a company with pricing power
    – Tatton Asset Management posted an average operating margin over 5 years of 35.4%.

What does this mean for potential investors?

Some of the highest quality stocks on the market have defensible models that can deliver high levels of shareholder return over the long term. But there are no guarantees and it is important to do your own research. Indeed, we have identified some areas of concern with Tatton Asset Management which you can read about here.


About Us

Stockopedia helps individual investors make confident and profitable choices in the stock market. Our StockRank and Factor Investing Toolkit offers institutional-grade insights on thousands of global stocks. Voted ‘Best Investment Research Tools’ and ‘Best Research Service’ in the 2021 UK Investor Magazine Awards.

Related posts:

  1. Best aggressive hybrid fund ranked by CRISIL with 1-year returns of up to 50%
  2. Harbert United States Real Estate Fund VII, LP announces
  3. The real estate investment company PAG Investments becomes
  4. Billionaire Howard to pay back cash from secret fund

Recent Posts

  • Winning bets? The meme stock frenzy of 2021 returns | Stock markets
  • Is SoFi Stock A Buy After Q2 Earnings Beat?
  • Baltimore Industrial Market Remains Tight Despite Economic Volatility – Trade Observer
  • Shareholder Alert: Robbins LLP Notifies Investors of Class Action Lawsuit Against Tuya, Inc. (TUYA)
  • Platform assets continue to decline despite ‘resilient’ adviser flows

Archives

  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021

Categories

  • Beta Data
  • Finance Debt
  • Returns Of Assets
  • Systematic Risk
  • Volatility
  • Terms and Conditions
  • Privacy Policy