FYI: I’ve long argued (and proven empirically) that there is a strong correlation between improving return on invested capital (ROIC)[1] and increasing shareholder value. Nevertheless, the majority of mutual fund managers continue to pick stocks using accounting-based metrics such as price-to-earnings ratios, return on equity, or accounting book value.
My firm analyzes[2] these metrics for all the holdings of over 7,500 U.S. ETFs and mutual funds daily to identify which fund managers put their analytical money where their mouth is. Occasionally, I come across a fund whose managers look beyond accounting earnings in their investment strategy.
Regards,
Ted
https://www.forbes.com/sites/greatspeculations/2019/07/31/this-fund-finds-value-by-recognizing-the-flaws-in-accounting-earnings/?ss=etfs-mutualfunds#406df408b20b
