High Growth Companies Normally Gave High Multiples

High growth companies normally have high multiples.
I created this table to show the relationship between growth and multiples
In short, a PE ratio of 50 requires a 20% earnings growth over 5 years to turn that multiple from 50 -> 20.I optimise my portfolio for these metrics.

My aim is to maximise FCF ROC first, then FCF Growth, then FCF margin and then finally FCF yield.

* taken from my latest factsheetPS: Long Equity runs a concentrated portfolio of value-creators and price-setters. We only hold companies that can (i) invest capital at significantly higher returns than their cost of capital (value creation), and (ii) raise prices without impacting demand (price setting).

Returns on capital must be high, consistent and unleveraged, with competitive advantages, ideally switching costs and network effects, preventing returns and margins from being competed away. We pursue a long-term strategy to minimise transaction costs and defer capital gains by investing in companies capable of compounding indefinitely.https://longeq.com/wp-content/uploads/2022/08/Long-Equity-August-2022.pdf

# Tips For Beginners

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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  • powerbert
    ·2022-09-07
    Thanks for sharing.
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    • ngckkk
      nice
      2022-09-07
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  • jgaldon
    ·2022-09-07
    True, thanks for sharing
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  • Khikho
    ·2022-09-07
    资本回报必须高、稳定和无杠杆,具有竞争优势,理想的转换成本和网络效应,防止回报和利润率被竞争夺走。我们奉行长期策略,透过投资于有能力无限期复利的公司,尽量减低交易成本及延迟资本利得。
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  • ilod
    ·2022-09-07
    Thanks for sharing! 😘
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  • Weiss
    ·2022-09-07
    thanks for sharing
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  • tyk23
    ·2022-09-18
    thank you
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  • Henryee18
    ·2022-09-07
    Thanks
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  • Apple99
    ·2022-09-07
    [Miser]
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  • Zhuzhuzhu
    ·2022-09-07
    🤓
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  • Ericho
    ·2022-09-07
    [Smile][Smile]
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  • yuannn
    ·2022-09-07
    nice
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  • FrankieRed
    ·2022-09-07
    ok
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  • kyawkh
    ·2022-09-07
    ok
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  • 寂静De夜晚
    ·2022-09-07
    🤓
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  • JoseYam
    ·2022-09-07
    👍🏼
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  • LynL
    ·2022-09-07
    [微笑]
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  • Arnoldy
    ·2022-09-07
    Like pls
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  • PYing
    ·2022-09-07
    Ok
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  • Leo92
    ·2022-09-07
    👌
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  • 甄珍珍
    ·2022-09-07
    🤓
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