ADBE
💼 Adobe has a very solid market share in the sector where it operates.
📈 The company exhibits exceptionally high returns on capital due to its low capital intensity.
😴 Despite these factors, the speaker does not include Adobe in his portfolio, prioritizing investments that provide peace of mind and align with his understanding.
@invertirdesdecasa:
“Another example that they have asked me a lot about today: Adobe. Adobe, the digital software company, a company that any person, without being a designer, graphic designer, I think I say it right, knows that it has a very solid position, a very solid market share in the sector where it works, very solid, that it has not high, extremely high returns on capital, not high, that is, the returns that Adobe has on capital are ridiculously good. Why? Very simple, it is not capital intensive, it does not need many plants, properties to function, it does not have to pay like Intel a plant of 25,000 million dollars to just deliver its product. It can make a lot of money with little. What does that mean? I earn a lot with little, high returns on the little I have to work with, and very high returns. Does that mean I am going to have it in the portfolio because it is, I don’t know, they have been asking me about it, it is at lows of, I don’t know, the last year, 2 years, 3 years? I don’t have any idea, I don’t see the charts much. No, not at all. The truth is that it would seem to me something that would not let me sleep peacefully, that would make me be every day wondering if I should have or not have this company in the portfolio, and that is not my way of investing. My way of investing is to say, ‘Does this company leave me calm in its business, and do I understand it? Does it leave me calm in its valuation, and besides, is it an excellent company, a good business with all these things that we said at the beginning of high return on capital, low level of indebtedness, competitive advantage, good future prospects, and all those wonderful things that we want to find in businesses when investing?'”
Watch the exact part of the YouTube video where the stock is discussed here:
View the video on YouTube.
Read more articles by the world’s top 100 analysts on Adobe (ADBE) at the following link. ADBE stock.
