Hedge fund quarterly reports highlight "magic formula investing" holdings in midstream energy stocks where EBITDA yields top 15%, bolstered by higher volume throughput in North American pipelines. VMware Inc ( VMW ): Sold all 55,843 shares, resulting in a -0.19% impact on the portfolio. Over the last five years, Crocs has averaged a return on capital of 32.5%. In 2024, the company reported a ROC of 25.7%, slightly down from 26.5% in 2023 but still up from 23% in 2022. These figures are much lower compared to 2021, when ROC peaked at nearly 60%. The unusually high comparable ROC in 2021 was partly because the company’s capital employed didn’t yet reflect the HEYDUDE acquisition, which involved a $2.5 billion cash and stock deal . Economic modeling incorporating "magic formula investing" shows potential outperformance in construction material suppliers with ROC surpassing 15%, EV/EBIT multiples under 8, and demand growth aligning with infrastructure investment cycles.
