10,000% return study.
Alta fox conducted a 100-bagger study, in which they studies all 100x returns ending between $150M USD and $10B during a study period of 2015 to 2019.
The main findings🧵
The multiple expansion is as important if not more than the earnings growth.
Alta fox conducted a 100-bagger study, in which they studies all 100x returns ending between $150M USD and $10B during a study period of 2015 to 2019.
The main findings🧵
The multiple expansion is as important if not more than the earnings growth.
Here is the scanner they used to find these winners.
Do not close your eyes to foreign companies.
Most 100x came from Europe.
here is the exchange breakdown:
•21.15% Nasdaq(us)
•13.46% AIM(uk)
•12.5% OMX(mix)
•11.54% ASX(au)
•9.62% XETRA(de)
•7.69% Oslo Bors(no)
Most 100x came from Europe.
here is the exchange breakdown:
•21.15% Nasdaq(us)
•13.46% AIM(uk)
•12.5% OMX(mix)
•11.54% ASX(au)
•9.62% XETRA(de)
•7.69% Oslo Bors(no)
The best industries were technology and healthcare
The main reasons:
•low unit costs
•high gross margins
•high operational leverage
•growth opportunities
Consumer staples, Communication and Industrials for less than 25%.
The main reasons:
•low unit costs
•high gross margins
•high operational leverage
•growth opportunities
Consumer staples, Communication and Industrials for less than 25%.
Companies returning 100x are represented through all groups but mostly end up in the $300m to $2b range.
Smaller companies returned the most at the end of the period which often came from near bankrupt companies with low multiples combining both earnings and multiples expanding
Smaller companies returned the most at the end of the period which often came from near bankrupt companies with low multiples combining both earnings and multiples expanding
The best performers had the highest gross and profit margin.
They had the smallest SG&A percentage.
In short their competitive advantage allowed them to high margins while keeping their expenses low. They often have the best product or/and service.
They had the smallest SG&A percentage.
In short their competitive advantage allowed them to high margins while keeping their expenses low. They often have the best product or/and service.
The bottom line and revenue growth matter.
The best performers have had the ability to grow their earnings consistently.
The acceleration of earnings is important to expand the multiples.
Thus earnings deceleration for the short term can offer massive long term results.
The best performers have had the ability to grow their earnings consistently.
The acceleration of earnings is important to expand the multiples.
Thus earnings deceleration for the short term can offer massive long term results.
91% of companies had at least a medium competitive advantage!
The best performers had the highest multiples, even in 2015 at the start, however 82% of companies started at below 3x NTM Sales, 20x NTM EBITDA, and 30x NTM PE.
The best of the best started with lower multiples and expanded earnings growth to allow for higher multiples.
The best of the best started with lower multiples and expanded earnings growth to allow for higher multiples.
The Takeaways:
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