In this new episode of Value Investing FM, Adrián and Paco discuss an essential issue when investing, the analysis of the management team. We will start with the 9 steps we follow to assess a management team, continuing through our top-3 favorite CEOs, and ending with recommended books on management analysis.
Tabla de contenido
- 1 Listen to the program: The Management Team: How to Analyze It, Top 3 and Recommended Books
- 2 How to Analyze a Management Team in 9 steps
- 3 Management Team: Top 3 CEOs
- 4 Books and readings on management team analysis
- 5 Recommended links
Listen to the program: The Management Team: How to Analyze It, Top 3 and Recommended Books
Here you have the episode Summary of the Year 2018: Lessons, Projects, Readings and Awards:
Finally, as always, we would appreciate very much if you share the episode on social networks and give us your 5 stars on iTunes and your like on iVoox, Spotify and YouTube, as you will help us to keep this podcast existing and growing .
How to Analyze a Management Team in 9 steps
- Who is on the board of directors?
- What experience do you have in the sector and the company?
- Are there politicians on the board of directors?
- Do the company and the management team have a clear and coherent objective and strategy?
- Do they have a short or long-term vision?
- Are managers focused on creating long-term shareholder value?
- Have they been able to maintain or increase the competitive advantages of the company?
- Has the board of directors met your past expectations? (See presentations from previous years)
- Have they allocated the capital correctly? (Investments, acquisitions, dividends, share buybacks ...)
- Dividend yield? Pay-out? Is the dividend sustainable? What is the dividend policy?
- What KPIs (Key Performance Indicators) does the company use? Are they the most suitable?
- How have the KPIs evolved?
- What is the tone used by the board of directors? (Aggressive, confident, prudent, neutral ...)
- Does the company admit its mistakes or try to justify them?
- What mistakes have they made in the past and how have they been fixed?
- What is the salary and compensation method of the board of directors? (Importance of incentives)
- Relative weight of executive compensation? (Capitalization, Income, EBITDA, Net Earnings ...)
- Is there any factor that could make us doubt the capacity, honesty or alignment with the shareholders of the management team?
Management Team: Top 3 CEOs
Paco's Top 3
- Mark Leonard (Constellation Software)
- Bob Kierlin (Fastenal)
- Ken Inverson (Nucor Steel)
Adrian's Top 3
- The Lundin Family (Lundin Group)
- Michael O´Leary (RyanAir)
- Fredrik Wester (Paradox Interactive)
Books and readings on management team analysis
- The Outsiders, de William Thorndike
- Investing between the lines, de R.J. Rittenhouse
- Berkshire Hathaway Shareholder Letters
- Fastenal Co-Founder Bob Kierlin’s Smart Frugality
- The Cheapest CEO in America
- Learning from Ken Iverson