Chuck Akre
High returns on equity, earned without leverage, with somewhere to reinvest them.
| Measure | Formula | Median | Middle half | Reporting it |
|---|---|---|---|---|
| Return on equity | Net income ÷ shareholders’ equity | 11.7% | 6.3% – 20.4% | 537 |
| Debt to equity | Total debt ÷ shareholders’ equity | 0.79x | 0.39x – 1.45x | 442 |
| Cash conversion | Operating cash flow ÷ net income | 1.78x | 1.36x – 2.42x | 414 |
| Return on equity, sustained | Needs ten years of filings | — | — | — |
Where each comes from
| Return on equity | The first leg: an extraordinary business, which he defines by a high return on equity sustained over time rather than by growth in reported earnings. |
|---|---|
| Debt to equity | The qualifier that does the work. A high return on equity produced by borrowing is not the same finding, so the leverage behind the number has to be read alongside it. |
| Cash conversion | Compounding requires cash that actually arrives, since it is the cash that gets reinvested. |
| Return on equity, sustained | Akre's first leg is a high return on equity held over time rather than in one good year. He publishes no number, so this checks how many of the last ten years cleared the median of every company here — that reading is ours, not his. |
Source: Akre Capital Management letters and interviews; the “three-legged stool”.
What this cannot tell you
The second and third legs — management acting like owners, and a reinvestment runway long enough to matter — are judgements about people and end markets. Neither is computable from a filing.
This page describes a published method and applies its measures to filings. It is not a score, not a ranking and not a recommendation, and no page here aggregates these into a verdict. · All 11 metrics