ROIC
Retail Opportunity Investments Corp.
stock NASDAQ

In the context of your question it’s return on incremental capital that matters, not headline ROIC

I am going to hold because I'm a long term holder for a decade+. I read some substack articles, Lumine currently operates at 35% ROIC, and at 19 times cash flows. Even if ROIC declines to 25-30%, they are going to make a lot.

Well, you’re thinking of incremental ROIC, but yes.
Even so, March 2026 absolute ROIC was around 21%, and incremental around 17%.
As per Buffett, that means I can expect a 17% annual return over the long run if there is no more ROIC compression

Yeah but there is a question they are understating their depreciation on the income statement & so there ROIC is not high quality.
So the jury is still out on that.

People in this subreddit forgot about ROIC

NVO's 2026 Q1 results are in. Since prices have risen recently, and it's being talked about on this sub again, I thought I'd attempt to compare its intrinsic values across a few different valuation models. Full disclosure, I have about 10% of my portfolio in NVO right now, after starting to buy this year. That said, I want to know, what do ***you*** think it's worth?
# Model Summaries
FCFE Model: $55.73
Relative Valuation Model: $114.6
Ben Graham Formula: $69.72
Margin of Safety: 17.35-59.81%
# Business Story
Novo-Nordisk is the second-largest pharmaceutical company in the diabetes/obesity market, behind competitor Eli Lilly. Its market share is approximately \~30% worldwide, versus Eli Lilly's \~35%.
I believe that Novo-Nordisk still enjoys a significant competitive advantage in the form of economies of scale and the remaining patents in its portfolio. At least, it does for now. This edge will probably be eroded away in the coming 5-10 years, as competition increases and patents expire.
There's considerable resistance in the US market specifically, where Eli Lilly enjoys regulatory favoritism. This is where I think the edge will most aggressively be destroyed in the coming years. Even so, its profits are still very healthy and are continuing to grow.
# FCFE Model
In order to more accurately value Novo-Nordisk, I capitalized R&D expenses over the past 10 years. Saving you from the math, I estimated the R&D asset as worth about $26,857.59 million USD, the amortization this year to be worth $3,285.13 million USD, and the R&D expense this year was $8,179.81 million USD. After calculating many values, I added R&D into the mix to get a clearer picture of intangible assets, return on equity, and earnings or dividends. The following numbers are in millions of USD.
* 5Y Normalized FCFE: $18,837.53
* Normalized to revenues over the past 5 years, because FCFE is usually quite volatile.
* TTM Earnings: $20,626.68
* Capitalized R&D, net of non-operating income and interest.
* Non-cash ROE: $47.83%
* High Growth: (1-18837.53/20626.68) x 0.4783 = 4.149%
* Terminal Growth: 3.548%
* Using the long-term Netherlands government bond rate as a proxy for long-term nominal growth in the country.
* Cost of Equity: 4.93 + \~1.191 x 4.23 = 9.966%
* Using the RFR of the US, because I am valuing equity in US dollars. Aswath Damodaran's implied ERP is used here as well. The beta is a bottom-up beta, using total book debt in place of the market value of debt, as I expect Novo-Nordisk is not so distressed as to make a large difference there.
* The beta used is forward-looking and higher than any recent historical regressions, reflecting risk associated with expiring patents and increasing competition.
* Shares (diluted): 4446.4 million
* I added the SBC shares outstanding; otherwise, it would be 4444 million shares.
**No-Growth Value:** $46.55
* (20626.68/4446.4)/.09966 = $46.55
* This implies that there is NO speculative element (i.e., attributable to expected growth) in the market price.
**Estimated Value:** $55.73
* High-growth stage: (1-1.04149\^5/1.09966\^5)/(0.09966-0.04149)x(18837.53x1.04149)/4446.4 = $18.05
* As competitive advantages all but *entirely* disappear, payout ratios will change to reflect this in order to maintain growth. Assuming a return on equity equal to the cost of equity in the terminal stage, payout becomes:
* 1-0.03548/0.09966 = 64.40%
* Cost of equity remains the same in terminal growth, as a beta below 1.2 is still reflective of a stable, mature firm like Novo-Nordisk.
* Terminal-growth stage: $36.73
* Earnings: 20626.68x1.04149\^5 = $25275.8
* FCFE (terminal): 0.644x25275.8 = $16277.6
* 16277.6x1.03548/(.09966-.03548)/1.09966\^5/4446.4 = $36.73
* Cash: $0.9534
* 4239 / 4446.4 = $0.9534
* Total Value: 18.05+36.73+0.9534 = $55.73
**Margin of Safety:** 17.35%
* 1-46.06/55.73 = 17.35%
# Relative Valuation
Since EV/Invested Capital has a high amount of explanatory power for most firms (R-squared of 51.3% in Europe), I would like to use it for valuing Novo-Nordisk. This is not an *intrinsic* valuation, but one based on *how the market should price the asset if it were internally consistent with all other firms.* The equation I am using was derived by Professor Aswath Damodaran, which can be found on his website.
EV/Invested Capital = 4.46 + 0.90 x G + 1.50 x ROIC - 0.05 x DFR
* ROIC: 17.21%
* DFR: 21.12%
* G: 1.39%
* This is a forward analyst estimate of earnings growth, since I did not have an estimate for forward revenue growth.
* Invested Capital: $107968.59 million
* R&D asset is added here.
**Predicted Value:** $114.6
* 4.46 + 0.90 x 0.0139 + 1.50 x 0.1721 - 0.05 x 0.2112 = 4.7201 x 107968.59 / 4446.4 = $114.6
**Margin of Safety:** 59.81%
* 1-46.06/114.6 = 59.81%
# Ben Graham Intrinsic Value Formula
It always comes full circle to Benjamin Graham. His simple heuristic for intrinsic value is still quite potent and useful, and usually quite reflective of our value investor philosophy. Instead of the completely traditional formula, I will use Damodaran's slightly adjusted version to account for current interest rates. Finally, to get a grip on risk in a way that has nothing to do with beta, I will also present some accounting measures of risk.
Value = EPS x (8.5 + 2 x G) x (RFR / AAA Rate)
* EPS: $4.639
* Accounts for R&D capitalization.
* 20626.68 / 4446.4 = $4.639
* Fundamental Growth Rate: 4.149%
* We will consider this as the annual rate for the next 5 years, as that is what the equation calls for.
* RFR: 4.93%
* AAA Rate: 5.51%
**No-Growth Value:** $35.28
* 4.639x8.5x(4.93/5.51) = $35.28
* This implies a speculative element of $10.78 to the market price.
**Estimated Value:** $69.72
* 4.639x(8.5+2x4.149)x(4.93/5.51) = $69.72
**Margin of Safety:** 33.94%
* 1-46.06/69.72 = 39.94%
**Accounting Risks**
* **Default Risk (Interest Coverage Ratio):** 28.09x
* 25043.68x(1-.258)/661.46 = 28.09x
* Verdict: Quite good. Synthetic AAA rating.
* **Leverage (Market Debt/Equity):** 26.78%
* 54844/204801.184 = 26.78%
* Verdict: Unsure. I would need to dig deeper to understand the optimal leverage for this firm.
* **Short-Term Liquidity:**
* **Quick Ratio:** 47.61%
* (4239+11902)/33904 = 47.61%
* **Current Ratio:** 79.97%
* 27112/33904 = 79.97%
* Verdict: Potentially dangerous if there is no option to refinance near-term debt.
* Overall risks: Short-term liquidity is tight, but default risk is very low. With the implied margin of safety being as high as it is, I believe overall risk is very acceptable for the long-pull investor.

I dont think its just gut feeling … i asked Nivesh multiplier conversational ai for Indian market
https://preview.redd.it/7cw8tcqdujzg1.jpeg?width=1179&format=pjpg&auto=webp&s=fbc987ce152b631a13a55f52e56500e033b01586
Decision Summary
Recommended View: Bullish Current Price: ₹54.85 Market Cap: ₹74,691.94 Cr Sector: Capital Goods - Electrical Equipment Rationale: Given the strong demand for renewable energy, robust guidance, low debt levels, and a solid ROIC, Suzlon appears well-positioned for growth. The inline earnings reports reflect stability amid challenging economic conditions, and improvements in EPS estimates indicate strong future prospects.
Historical Earnings vs Estimates
Suzlon Energy has recently maintained performance in line with consensus estimates:
Dec 2024: Actual EPS 0.00 vs Est 0.00 (Inline) Dec 2025: Actual EPS 0.00 vs Est 0.00 (Inline) Jun 2024: Actual EPS 0.00 vs Est 0.00 (Inline) Jun 2025: Actual EPS 0.00 vs Est 0.00 (Inline) Mar 2025: Actual EPS 1.00 vs Est 0.00 (Beat) Sep 2024: Actual EPS 0.00 vs Est 0.00 (Inline) Sep 2025: Actual EPS 1.00 vs Est 0.00 (Beat) Notably, there was a significant positive surprise in March 2025 and September 2025, where the actual EPS surpassed estimates by notable margins.
Revenue and Net Profit Trends
Current Revenue: ₹10,993.13 Cr Net Profit: ₹2,071.63 Cr In recent quarters, revenue has shown robust growth trends, primarily driven by increasing demands for renewable energy solutions. The exact quarterly figures over time are necessary for more nuanced insights, but overall momentum appears optimistic given sector trends.
Margins Evolution
Operating Margin: Information not provided requires further analysis. Net Margin: Current Net Profit margin stands strong at approximately 18.85%. A notable aspect of Suzlon is its low Debt to Equity ratio of 0.0505, indicating solid financial health which provides room to maintain or enhance operational margins further.
Assessment of Future Analyst Estimates
Analyst estimates project consistent EPS growth trajectory:
FY 26 E: EPS ₹2.00 (PE 20.00) FY 27 E: EPS ₹2.00 (PE 27.00) FY 28 E: EPS ₹2.00 (PE 27.00) Though the growth appears static at this point, it can be influenced by execution of strategic initiatives in response to rising energy demands.
Overall Fundamental Trajectory
Suzlon Energy stands out for its high ROIC of 50.97%, consistent earnings profile, and significant upside potential in revenue driven by increased admin demand for clean energy. The company is currently trading at a PE ratio of 23.16, which is reasonable relative to peers, considering its growth potential. While peers have high PEs, Suzlon's value proposition remains appealing, suggesting further growth over the medium term. Conclusion
Given the overall context of Suzlon Energy's financial health, market positioning, and potential catalysts in the sector, I'm reinforcing a Bullish view on the stock

I asked your question on Nivesh multiplier conversational ai for indian market
https://preview.redd.it/2hg4kt6krjzg1.jpeg?width=1179&format=pjpg&auto=webp&s=8d65ab765981ae239eb8bd0c7699126ac55bfd20
Decision Summary
Rating: Bullish Current Price: ₹2897.60 52W High/Low: ₹3228.00 / ₹2329.90 Key Takeaway: With a strong earnings history reflecting consistent performance against estimates, alongside robust revenue growth and sustainable profitability, Ajanta Pharma is well positioned for long-term growth despite some expected short-term volatility. The technical indicators also suggest a positive price movement potential.
Historical Earnings vs Estimates
Recent Performance: Dec 2023: Actual EPS 17.00 vs. Estimate 16.00 (Beat) Dec 2024: Actual EPS 19.00 vs. Estimate 16.00 (Beat) Jun 2024: Actual EPS 20.00 vs. Estimate 18.00 (Beat) Jun 2025: Actual EPS 20.00 vs. Estimate 21.00 (Miss) Mar 2024: Actual EPS 16.00 vs. Estimate 12.00 (Beat) Mar 2025: Actual EPS 18.00 vs. Estimate 17.00 (Beat) Sep 2023: Actual EPS 16.00 vs. Estimate 10.00 (Beat) Sep 2024: Actual EPS 17.00 vs. Estimate 18.00 (Miss) Sep 2025: Actual EPS 21.00 vs. Estimate 22.00 (Miss) Summary of Earnings Performance: Out of the last nine quarters, Ajanta Pharma beat estimates in seven, demonstrating strong operational performance and possibly leading to market confidence.
Revenue and Net Profit Trends
Financial Results: Current Revenue: ₹4742.60 Cr Current Net Profit: ₹920.39 Cr 48% Revenue Growth: Historical data indicates a steady increase in revenues and net profits driven by robust sales in domestic and international markets. Trend Analysis: The company has shown a strong upward trend in revenues, which reflects successful product launches and effective market strategies, especially in regulated markets like the US and Europe.
Margins Evolution
Operating Margin: Indicative of operational efficiency. Net Margin: Suggests the overall profitability. While explicit margin percentages weren’t provided, trends show positive operational performance, implying that margins are either stable or improving, lending to good earnings visibility.
Assessment of Future Analyst Estimates (EPS Growth Trajectory)
Future PE ratios: FY 26E: EPS 85.00, PE 33.00 FY 27E: EPS 99.00, PE 29.00 FY 28E: EPS 113.00, PE 26.00 EPS Growth Trajectory: The increasing EPS estimates indicate a trajectory of strong earnings growth over the next few years. The declining PE ratio suggests that the stock may become increasingly attractive as earnings rise.
Overall Fundamental Trajectory
Key Strengths:
Low Debt: Debt-to-equity ratio of 0.057, showing a conservative capital structure. High ROIC: 23.044%, indicating efficient capital management. Liquidity: A current ratio of 3.572 signifies solid short-term financial health. Market Position: Ajanta Pharma is well-positioned within the healthcare sector, especially given its strong foothold in pharmaceutical manufacturing and distribution.
Competitive Landscape: The company is competitively valued against peers, with a PE below some key market players like Sun Pharma and Abbott India, yet showcasing comparable growth prospects.
Technical Analysis
Current Sentiment: Technical indicators are showing a very bullish signal. SMA Analysis: The stock is trading above its 50-day and 200-day moving averages, indicating a strong uptrend. Conclusion
Ajanta Pharma exhibits strong fundamental performance, backed by a solid earnings track record, low leverage, and attractive future growth estimates. Despite some misses on estimates for June 2025 and September 2025, overall the company demonstrates a healthy trajectory. The company's proactive strategies seem to position it well for sustained growth.
Recommended View: Bullish

With a ratio greater than x5 times, even 1% interest would make things difficult. Especially if things don’t go your way, with the goal of increase earnings by reducing OPEX, which for a business like eBay would be a loss of growth (ROIC), if you reduce to much. *RC promise "reducing costs" (OPEX)*

1. Isn't P/E for semiconductors counterintuitive from a value perspective? You look for infinite P/E to indicate earnings being negative at the bottom of a cycle. P/E is historically a warning sign that earnings have nowhere to go but down. I get that this may be a repricing event - does your algorithm determine the P/E score based on the industry standard it is in?
- Does business quality account for the fact that MU is benefiting from massive pricing leverage that will get consumed at some point? A 74.9% gross margin blasts ROE and ROIC to super positive numbers that aren't realistically sustainable.
- CAGR & FCF trends QoQ are 75% up, but if your system looks at YoY numbers it makes the business look like it's in hypergrowth and you just extrapolated trough-to-peak recovery as sustainable growth.
I think the basic concern comes down to - I thought that applying these concepts to cyclical names usually gives you misleading outputs.

That's why I said it could be a bargain or a stock to avoid. If you believe META will achieve good ROIC or not is up to you. No recommendations.

Your version is probably the better default for cyclicals, and probably right more often than ours. We do something half way - exclude the two worst cyclical sectors (basic materials, consumer cyclical) at the sector level, then take as reported margins/ROE/ROIC at face value within the sectors we do score. That's why MU got through. Mean reverting 41% margins to semi industry medians inside the technology sector would have screened it out at $337.

Still learning here, but I've been trying to maintain a checklist for myself with these four metrics:
1. Before looking at the price (is it cheap), I look at bankruptcy risk. I use the **Altman Z''-score**, which combines working capital, retained earnings, operating profitability, and equity-to-debt ratios into a single number. Above 2.6 = probably safe, below 1.1 = danger zone, in between = gray area. I use the Z'' version (not the original from 1968 geared towards typical manufacturing companies including a revenue-to-assets ratio), which works better for tech or service businesses, and across sectors in general.
2. Operating margin vs sector median (**margin reversion risk**): If a company has a 35% operating margin and its sector median is 22%, that's a 1.6× premium. The question is: why, and is it durable? If it's a real competitive advantage (network effects, switching costs, regulatory moat), the premium may hold. If it's just a cyclical tailwind or accounting quirk, margins will mean-revert. The "cheap" P/E you're seeing is based on peak margins that won't last. Mauboussin's work at Credit Suisse showed that high margins tend to converge toward sector averages over 5-10 years. So I flag anything over 1.5× sector as "reversion risk."
3. Does the business actually create value? Return on Invested Capital (ROIC) tells you how much profit the company generates for every dollar of capital tied up in the business. If **ROIC > WACC** (weighted average cost of capital), the business creates value. If ROIC < WACC, it's destroying value. A low P/E then just means the market correctly prices in that the company is burning capital. I find this the single best filter for separating "cheap" from "cheap for a reason." A company with a P/E of 8 but ROIC of 4% vs a 10% WACC is not undervalued. It's burning capital at an irresponsible rate.
4. In what direction is the company's performance trend moving (improving or deteriorating)? Using a classic **Piotroski F-Score** here with a 9-point checklist that scores whether profitability, leverage, and operating efficiency are improving or declining year-over-year. (Score of 8-9 = strong improvement. Score of 0-3 = things are getting worse.) I love how the F-Score catches companies that look cheap on P/E but are actively deteriorating: the reason why it was built in the first place by Stanford professor Joseph Piotroski to filter value traps out of high-book-to-market stock screens.
I'm still building my intuition on how to weight these, so learning on the fly from the other comments here as well. For the many here who've been doing this longer than me, what else to add to the list?

A month ago, on April 1st, my value algorithm flagged Micron as the top value pick in the S&P 500 and I was like, "are you kidding me?" How can a stock that had run from roughly $50 in 2023 to $338 in April 2026 could be a value stock? I genuinely thought it was a bug.
But then i checked the numbers. They held up
My algorithm scores stocks out of 100 across four dimensions. I've posted about the framework in this community [prevously](https://www.reddit.com/r/ValueInvesting/comments/1ngp8l7/built_a_grahaminspired_value_framework_that/), but here's how MU scored on April 1st at $337.84:

\- Traditional valuation: 16/30. P/E 15.76, P/B 5.25, EV/EBITDA 10.21. Multiples were reasonable but not bargain-bin cheap, which is why this leg lost the most points.
\- DCF margin of safety: 20/20. Fair value $586.77 against price $337.84, 82% margin of safety. Maximum points.
\- Business quality: 35/35. ROE 40.84%, ROIC 27.69%, current ratio 2.90, D/E 0.15, interest coverage 80x, net margin 41.49%. Perfect score across every quality metric the system measures.
\- Growth sustainability: 10/15. Revenue growth 13%, FCF yield 5.8%.
Total: 81/100. Rank 1 in the S&P 500 for April 2026.
What made this counterintuitive was the chart. But underneath it, EPS had gone from -$5.34 in FY2023 to $21.44 on a trailing basis. Earnings were running faster than price. At 16x TTM EPS, Micron was cheaper than it had looked in years, even with the stock up seven-fold from its cycle bottom.
In the 35 days since, MU has moved from $337.84 to $640.20, around +90%.
The lesson: price doesn't determine whether something is a value stock. Earnings do.
Curious how others approach value in cyclical stocks. Not investment advice. DYOR.

Makes sense! That seems like a good way to analyse companies. The part I’m not good at is finding stocks that could have high ROIC/FCF, there are so many stock tickers out thete

NVDA is doing something that almost no company at this size has ever done and the numbers make it genuinely hard to argue against the long term story. But there is one part of this picture that most people are completely ignoring right now.
First the business reality. Revenue grew 73.2% year over year to $215.94B. Net income is $120.07B on $215B of revenue which is a 55.6% net margin. Think about what that means. More than half of every dollar of revenue becomes profit. Operating cash flow is $102.72B annually. ROE of 101.48% and ROIC of 72.43% means the company is generating more than a dollar of profit for every dollar of equity invested. These are not growth stock metrics, these are metrics that belong to a monopoly operating at peak pricing power. $62.56B in cash against only $11.41B in debt. The balance sheet is fortress-level.
The forward P/E is 17.48x. The PEG ratio of 0.63x says you are paying 63 cents for every dollar of growth. Compare that to AMD at a P/E of 137x or AVGO at 83x and NVDA at 40x trailing and 17x forward is the most reasonably valued mega cap AI play in the semiconductor space right now.
The DCF model says the market is pricing in 45.3% FCF growth every single year for the next three years to justify $196.50. That is not impossible given the current trajectory but it leaves zero room for error. One quarter where hyperscaler capex moderates, one export restriction tightening on China, one AMD product cycle that takes meaningful share, and the valuation re-rates sharply. The sensitivity table shows that even at 30% FCF growth annually for five years the intrinsic value comes out at $113. The stock is at $196.
The insider activity is the flag I keep coming back to. In the last three months insiders sold 38 times on the open market and bought zero times. Forty-seven total sells against fifteen buys and all fifteen buys were stock awards, not a single person writing a personal check to buy shares. Mark Stevens sold 221,682 shares in a single day. The CFO Colette Kress sold multiple times. Jensen Huang himself has been a consistent seller. These are the people who built this company and know every customer conversation happening right now. They are not buying.
Earnings are May 20. Fourteen days away. The options market is pricing a 10.2% move in either direction The put-to-call ratio is 0.36 which means three calls are being bought for every put. The options positioning is aggressively bullish going into earnings which historically means the bar for a positive reaction is very high.
The honest picture is this. The business is genuinely amazing and the forward valuation at 17x earnings is more reasonable than almost anything else in AI. But you are buying 14 days before earnings on a stock where insiders have been systematically selling, where the DCF requires near-perfect execution to justify current price, and where options traders have already priced in good news. The 50-day SMA at $187.33 is your real support if momentum fades further from the current $196.50.
If you are a long term holder this is a compounder worth owning. If you are thinking about initiating a new position today specifically, waiting to see what May 20 delivers before sizing up is the more disciplined decision.

My advice is to read books (intelligent investor, little book of valuation, little book that beats the market, one up wall st). If you go on YouTube listen to real investors, Buffett, Lynch, Gayner, etc. Stick to industries you know and understand.
Eventually you will be able to look at a company and know if it’s worth actually doing a deep dive or not very quickly. It doesn’t take a genius to find companies that are trading below 15x FCF and then look into why and if there is mispricing in the market. Or find companies expected to grow at a lower rate than what you see the business actually doing. Or finding a company with an ROIC double its WACC is going to generate positive returns.
These are all simple things made complicated due to lack of knowledge to interpret the fundamental issues causing these numbers and if it’s structural or temporary.
For example a company could be in a cyclical industry/declining FCF so 15x is not cheap. High ROIC doesn’t guarantee future returns if there is increased competition and margin contraction. Or put simply you could be wrong and the company doesn’t grow at the higher rate due to an unforeseen headwind.
If you can separate structural problems from temporary issues that’s your edge.
The final and most important thing about value investing is having discipline, patience, and proper risk management. It’s a marathon not a sprint. Sometimes it just takes one earnings call, other times it takes years for the thesis to play out. And if you don’t know how to manage your risk, you will not be able to stomach the volatility. Companies generally don’t get mispriced because everything is going smoothly, so it’s not going to be a smooth ride back to fair value and beyond.

It is possible that AMZN, GOOG, MSFT have totally misjudged the future of technology and that their investment in AI and data will have a poor ROIC, but they have a strong history of making good decisions and creating revenue growth from well allocated cap ex.
I do not know everything they know, but it seems evident that they feel their best cap ex is in this direction.
Barring some unforeseen new technology, it seems more likely than not that they are spending their money on investments they believe will pay off for themselves and their shareholders. At this time that is creating strong demand for “chip stocks” and related hardware.

I do my own research and DCF for each stock that I'm interested in. I look for high ROIC, high FCF, and cheap valuation.
I can't say much about mining because I don't know anything about them and don't know how to value it lol, same with banks, financial service companies.

Quantum waste of time in my opinion. Let's look at the fads:
\- AI
\- VR
\-Cryptocurrencies
\-3D Printing
\- Quantum Computing
Storie Stocks are just that. As a PT Barnum put it, "There's a sucker born every minute."
My suggestion: look at boring companies where the fundementals (ROIC, FCF etc.) support the price.