Fortuna Advisors' 2021 Value Leadership Report Highlights How Companies Can Achieve Sustained Top-Quartile Value Creation

NEW YORK, April 29, 2021 /PRNewswire/ -- Capital markets research by the management consulting firm, Fortuna Advisors, highlights how companies drive superior value creation.  Key findings include:

• GROWTH IS THE MOST IMPORTANT DRIVER - Revenue Growth and Reinvestment Effectiveness were the strongest drivers of top-quartile TSR, despite the common emphasis on profit margins and rates of return.
• SIZE OF THE PRIZE - Value leaders delivered 35% higher median annual TSR than the bottom-quartile group, and the market capitalization of the value leaders increased by over $10 trillion versus a decline of over $1 trillion for the bottom quartile.
• PAST PERFORMANCE IS NO GUARANTEE - Value leaders in the prior five years were as likely to drop to the bottom quartile in the recent period, as they were to remain top-quartile.
• INTANGIBLES INCREASINGLY DRIVE VALUE - Increasingly, value-driving investments appear on the P&L, not the Balance Sheet. Think R&D, brand building, and training expenses, for example.

The study evaluated the total shareholder return (TSR) performance, including dividends and share price appreciation, of the non-financial members of the Russell 1000 over the last five years.

The report also unpacks how recent trends in stakeholder value and corporate purpose have changed the nature of value creation. Prior to the digital era, value was largely created from tangible assets—factories, assembly equipment, vehicles, etc.—requiring large investments. Increasingly, investment has shifted to creating intangible assets like patents, customer relationships, brands and organizational capabilities.

The study goes on to summarize key differences in how varying industries achieved value creation, and provides a "deep dive" into the top-performing semiconductor industry. The authors also discuss the performance of, and investor expectations around, Tesla Motors; and tell the turnaround story of FMC corporation.

Fortuna Advisors (fortuna-advisors.com) collaborates with leaders to transform decision-making throughout their business to achieve exceptional results. Our management playbook delivers measurable outcomes through better insights, better decisions, and better behaviors.  Fortuna serve as a catalyst to create a culture of ownership, where everyone from the board to management and employees embraces a long-term investor perspective to unlock the organization's full value creation potential.

Link to Report 

SOURCE Fortuna Advisors LLC

Related Links

http://fortuna-advisors.com/

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