Hundred Bagger Secrets: Strong, Performance-Focused Corporate Culture

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Ultimately, a big part of the secret to finding hundred baggers is simply to find great companies before other investors do.

While many signs of great companies in the making ultimately show up in financial statements, there are others that do not.

For instance, a strong internal culture featuring employees with high morale is a hallmark of companies on the hundred bagger trajectory.

John Kotter, co-author of the book “Corporate Culture and Performance,” wrote in an article for Forbes.com: “We argued that strong corporate cultures that facilitate adaptation to a changing world are associated with strong financial results. We found that those cultures highly value employees, customers, and owners and that those cultures encourage leadership from everyone in the firm.” https://www.forbes.com/sites/johnkotter/2011/02/10/does-corporate-culture-drive-financial-performance/#99989ba7e9e9

Kotter and Heskett even conducted a study of firms with such cultures, comparing them against a sample of firms that do not have such cultures. Even after controlling for other variables, they found that the strong culture cohort experienced more than 4 times revenue growth, over 12 times share price growth, and a stagging 756 times earnings growth relative to the weaker culture cohort over the long term.

SixJupiter’s artificial intelligence uses data from Glassdoor to understand which companies have the kinds of culture and employee morale needed to generate outperformance.

Glassdoor data has been shown to correlate with stock price performance. A 2017 research paper published at the University of East Anglia found that companies with high employee satisfaction significantly outperformed the market over the eight year period observed. https://www.sciencedirect.com/science/article/pii/S0165176517304433

The authors of the study concluded that “Employees’ online reviews are good predictors of a firm’s financial results and, consequently, of value-relevance for investors.” https://www.glassdoor.com/research/satisfied-employees-drive-business-results/

SixJupiter is continually scouring the market of exchange traded US companies to find stocks that meet the attributes of hundred baggers. Visit sixjupiter.com to start taking advantage of SixJupiter’s artificial intelligence.

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