晨星持久的竞争优势用经济专利来改善投资回报英ppt课件

1、 2008 Morningstar, Inc. All rights reserved.Durable Competitive Advantages: Using Economic Moats to Improve Investment ReturnsPat Dorsey, CFA Director of Equity ResearchAgendaOur Approach to Competitive AnalysisWhat is an Economic MoatWhats NotWhere Morningstar Finds MoatsWhy Moats MatterUsing Econo

2、mic Moats in the Investment ProcessWhats A Moat?Capital seeks the areas of highest potential return, so all firms face competition that seeks to force down high returns on capital. But some firms generate high returns for a very long time. How? By creating economic moats around their businesses.An e

3、conomic moat is a structural business characteristic that allows a firm to generate excess economic returns for an extended period. Note that “structural means “inherent to the business.Smart managers and great execution are important, but theyre not structural attributes.Whats a Moat?The key to hav

4、ing an economic moat is the sustainability of excess returns, rather than the absolute level of return on capital. A company with 40% returns on invested capital (ROIC) due to a hot product has no moat. The returns cannot be forecasted with any level of confidence. Fashion stocks (Crocs, Heelys), Mo

5、torola RazrA company with 12% ROIC and a low cost of capital that is structurally protected from the competition may have a wide economic moat, because we can forecast those returns with a high degree of confidence. Pipelines, RailroadsSources of Economic MoatsIntangible AssetsBrandsPatentsApprovals

6、 & LicensesCustomer Switching Costs The Network EffectCost AdvantagesProcessLocationUnique AssetsScaleSources of Economic MoatsIntangible assetsBrands: Does it increase the consumers willingness to pay, or reduce search costs?Sony vs. TiffanyDoublemint & Juicy FruitPatents: Valuable, but sub

7、ject to expiration & challenge.Big pharma vs specialty pharmaLicenses & Government Approvals.Waste haulers, aggregate companiesSources of Economic MoatsSwitching Costs: Do the costs in time or money of switching to a competing product/service outweigh the benefits?Monetary/Labor Costs-Oracle

8、-Autodesk-Data processorsLow or uncertain benefits from switching-Amazon-Asset managers Sources of Economic MoatsThe Network Effect One of the most powerful types of competitive advantage, which occurs when the value of a good or service increases with the number of users. Examples of the Network Ef

9、fecteBay Western UnionMasterCard, American Express, Discover, VisaMicrosoftFinancial ExchangesSources of Economic MoatsCost Advantages Not necessarily tied to sizeProcess Invent a cheaper way of delivering a good or service that rivals cannot (or will not) replicate. Dell, Nucor, Steel Dynamics, Sou

10、thwest/other LCCs.Low-cost resource base Ultra Petroleum, Compass Minerals.Scale-Distribution Stericycle, Cintas, Sysco, UPS-Manufacturing Intel-Niche Markets/Single-Scale Efficiency Graco, BlackbaudWhats Not An Economic MoatSize / Dominant Market Share: High market share does not give a firm a moat

11、. (Ask Compaq or GM.) In fact, market share may be irrelevant bigger is not necessarily better. Technology: What one smart engineer can invent, another can improve upon. (Exception: Creating a standard thats widely adopted.)Easily-replicable cost advantages (lean manufacturing, outsourcing.)Hot Prod

12、ucts: Krispy Kreme, Tommy Hilfiger, Crocs, Iomega, etc.Can generate high returns on capital for a short period of time, but sustainable returns are what make a moat.Whats Not An Economic MoatManagement: Smart managers may create a moat over time, but great management is not a moat by itself. Go for

13、a business that any idiot can run because sooner or later, any idiot probably is going to run it. Peter Lynch“When management with a reputation for brilliance tackles a business with a reputation for poor economics, it is the reputation of the business that remains intact. BuffettManagement matters,

14、 but moats matter more.Where Morningstar Finds Economic MoatsThree groups: Wide, Narrow, and None.Wide moats are tough to find. Less than 10% of the 2100 companies that we follow have wide economic moats. (169, to be precise.)Moats vary by sector & industry. Fewer moats in highly commoditized or

15、 competitive sectors like computer hardware, consumer services (retail/restaurants), or industrial materials. Only 1/3 of the companies in these three sectors are wide/narrow moat.More moats in areas with high switching costs (data processors) and durable brands (consumer products), Why Moats Matter

16、Moats add intrinsic value!A company that is likely to compound cash flow internally for many years is worth more today than a company which isnt.Wide Economic MoatNo Economic MoatNarrow Economic MoatROICROIC ROICTime HorizonTime HorizonTime HorizonWhy Moats MatterWhen comparing two companies with si

17、milar growth rates, returns on capital, and reinvestment needs, the company with the moat has a higher intrinsic value.Underestimating a moat results in opportunity cost, while overestimating a moat can cause you to pay for value creation which never materializes. Some fast-growing companies are wor

18、th the premium, because the excess returns are more likely to persist. If a firm has a wide moat that will allow it to reinvest cash flow at a high rate of return for many years, what looks expensive may actually be quite a bargain.Why Moats Matter“Time is the friend of the wonderful business, affor

19、ding it the opportunity to reinvest incremental capital at favorable rates and increase the value of the enterprise. Over time, the price you paid for a terrific company looks cheaper and cheaper. For the inferior business at the cheap price, time may turn out to be the fell destroyer.“ Bob Goldfarb

20、, Sequoia FundWhy Moats MatterMoats enforce investment discipline.High returns on capital will always be competed away eventually.For most companies (and their investors), the regression to the mean is fast and painful.But a few generate excess returns for many years, and moats give us an analytical

21、 framework for selecting them. Why Moats MatterCompanies with moats have greater resilience. If a firm can fall back on a structural competitive advantage, its more likely to recover from temporary troubles. This is a great psychological backstop for the investor whos buying when everyone else is sc

22、reaming “sell! If youre confident in the moat, its easier to average down if you initiate a position too early. 18Isnt the Moat Already Priced In?Short answer: Sometimes, but less frequently than you might think.Long answer:Most market participants own securities for short time periods, and moats ma

23、tter much more in the long run than over the short term. (Time-horizon arbitrage.)Recency bias causes most investors to assume that the current state of the world (good or bad) persists for longer than it usually does. Our performance record suggests that waiting for wide moats to become cheap is a

24、compelling strategy. Wide + CheapReturns through 9/18/2021 * Annualized returns Source: MorningstarYTDTrailing1-YearTrailing3-Year*Trailing5-Year*Morningstar Wide Moat Focus Index (ETN Ticker: WMW)41.6%9.3%6.0%9.0%S&P 500 Index20.5%-9.1%-4.8%1.0%The Wide Moat Focus is an index of our 20 most undervalued wide-moat stocks. Holdings are equally-weighted and re