An especially resonant segment of the New York City workshop conducted by Dr. Aswath Damodaran (New York University Stern School of Business) dealt with the issue of “quality growth” and how analysts conclude that a company is, indeed, a true gem.
A rarity: Certainly beyond the world of finance, “rarity” is commensurate with the value placed on an object. And in the valuation realm “quality growth is a rare exception,” Damodaran put forth. He went on to define “quality growth” as a company’s success in reinvestment in itself as opposed to gains from short-term efficiencies or acquisitions, for example. He shared his view that the “narrative and the numbers” join together to tell the story behind any valuation because, he explained, scaling up is hard to do. Any “story” that culminates with truly high returns on capital is a riveting tale achieving elusive—and very rare—quality growth.
For an archived version of the webcast of the three-hour live session, “Price and Value: Discerning the Difference, an Advanced Workshop,” click here.
Please let us know
if you have any comments about this article or enhancements you would like to see.