On 18th August 2008, The Edge published special report of the top 100 listed companies in terms of shareholder value creation / awards (I'll use SVA as short form).
That's the first time and the reason that i bought The Edge, after thinking about it for quite some time to decide to purchase that magazine (which cost RM 4.90). Talking about being careful with my money!.
Anyway, I've found a list of "candidates" for me to research further on some good stocks. It might worth my money after all!. Here's a list of the top 100 companies that appear in SVA 2007.
The companies listed here appears because these companies earn a return in excess of what the company's capital should earn. For the analytical person, the methodology is as below:
SVA = Return on Invested Capital (ROIC) - Weighted Average Cost of Capital (WACC)
(The edge's calculation formula is different from stated above, but the results are the same. I wonder why do they make the formula so complex, when they can "phrase" it like what i've phrased above.)
Here's the pullout page from The Edge on the methodologies used:
See the links below to learn more about ROIC, WACC, or both:
Return on Invested Capital by Wikipedia : http://en.wikipedia.org/wiki/Return_on_Invested_Capital
Return on Invested Capital by Fools.com : http://www.fool.com/investing/small-cap/2005/12/30/foolish-fundamentals-return-on-invested-capital.aspx
Spot Quality with ROIC : http://www.investopedia.com/articles/fundamental/03/050603.asp