With the NCAA’s college football playoff only a couple weeks away, Validea CEO John Reese recently took a look at some stock market “playoff” matchups that feature several global powerhouses, including Apple, Coca-Cola, and Google.
In a column for Forbes.com, Reese looks at how four pairs of market rivals stack up against each other. The matchups: Apple vs. Google, PepsiCo vs. Coca-Cola, Exxon Mobil vs. Chevron, and Anheuser-Busch InBev vs. Molson Coors.
Reese uses his Guru Strategies to analyze each firm on a purely quantitative basis. “The numbers might not tell you everything, but they tell you more than you might think,” he says, using Warren Buffett’s “durable competitive advantage” or “enduring moat” concept – seemingly a subjective characteristic – as an example. “In her book The New Buffettology, Mary Buffett–who worked closely with Mr. Buffett and is his former daughter-in-law–said that companies with durable competitive advantages typically have distinct quantitative characteristics,” Reese writes. “They tend to have high long-term returns on equity and total capital; long-term debt that is less than five times net annual earnings; and a lengthy history of persistently increasing earnings.”
To find out whom Reese declares the winners of the four market matchups, click here.