As an investor, I generally pay a lot of attention to the different metrics of a company, and then decide whether to invest or leave the company alone. Often times investors fail to take leadership and business model into account, and they miss out on enormous opportunities. There are a few companies whose business model and leadership are their main reason for success.
I’m not saying to disregard metrics for these next companies (some of them have very good metrics), but I am suggesting that we should look at other factors. Tim Tebow supposedly didn’t have the mechanics to play college football, yet is the most decorated quarterback to ever play at the collegiate level. Although his NFL career is questionable, his college success was remarkable. Some accomplishments include being the recipient of: The Heisman trophy, quarterback of the year, and leading the Florida Gators to more than one national championship game.
John Donahoe became CEO in 2008, and has seen eBay Inc (NASDAQ:EBAY) succeed in many ways. John was named as the fourth best “business person of the year” in 2012 by CNNMoney.com. In his time with eBay, John has taken shareholders on a ride worth remembering. In fact, over the past five years the stock has increased by an average of more than 19% annually. With approximately 30,000 current employees, the company boasts a market cap of over $71 billion. Fortunately for investors, eBay Inc (NASDAQ:EBAY) does show some pretty solid metrics. Its P/E of 27.6 is beating the industry average by a whopping 15.9. Revenues have increased 65% in five years, but the company does show a FCF yield of just 3.6%.
Primerica, Inc. (NYSE:PRI) is the largest financial services marketing organization in North America. Obviously they are doing something right as approximately 20% of its representatives have worked with the firm for at least twelve years. Tim Tebow often reminds us of the quote “Hard work beats talent when talent doesn’t work hard.” When the company was founded in 1977, Primerica had to overcome insurance companies filing complaints and taking up law suits against them for simply replacing their whole life insurance products with Primerica’s term life insurance. To this day Primerica representatives claim to “Join a crusade to right a wrong in the industry.”
Primerica spun off from Citigroup Inc. (NYSE:C) in April of 2010, and its shareholders have been rewarded kindly. From the time of its Initial Public Offering (IPO) the stock has increased nearly 63% and shows a P/E of 8.9 less than the industry average. It has outperformed both the life insurance industry and S&P 500 in 2012 – not to mention having nearly doubled their returns YTD. Approximately 85% of Americans are classified as middle income, and that’s where Primerica focuses its efforts. Representatives for most firms are penalized for opening investment accounts with less than $250,000 – Primerica makes money through monthly investments (with no set minimum) of $50 or more.
Google Inc (NASDAQ:GOOG) recently became the first tech company to achieve a stock price of $800/share. Many analysts believe the stock will reach the $1,000/share before 2014. Google acquires most of its revenues through search ads, but with Google holding approximately 70% of the worldwide market share in mobile devices; it appears to be headed in a good direction. Google Inc (NASDAQ:GOOG) appears to be making very wise decisions, something Tim Tebow talks about frequently. In most of his post-game interviews Tim claims he wants to “Be the best decision maker I can be.”