Does it matter if a company reinvests in its business?
One of the many factors to consider when investing in a business is whether or not a business is investing in itself.
Is there a correlation between the performance of a business and how it performs in the market? To some degree, the answer is likely yes.
Where would you rather invest?
Consider the case of staples versus technology companies. When we look at the capital expenditures plus research and development outlays as a percentage of sales for each of these groups, there is some pretty compelling data.
This is not the entire story, of course, but with tech companies doing well and staples lagging the market, it’s worth noting that the companies that are investing in their business tend to see a correlating positive performance.
Interested in investing in yourself with Barometer?
We look forward to speaking with you to discuss how our strategies may be right for you.