Economic Profit for Stock Investing

 Chart 1 Chart 2 Chart 3 Chart 4 Chart 5 Conclusion: Home Depot is definitely a company with an economic moat. Its current share price needs to be justified by further EVA improvement. Absent further tax reduction, EVA would need to be supported by growth. Pandemic-induced behavior seems to give that needed boost. However, it is hard to find value levers that could bring me a potential 50% capital gain from the current price at $327/share. HD is well-priced, and growth tends to be short-lived. 

  Chart 1 Chart 2 Chart 3 Chart 4 Chart 5 Chart 6 Chart 7 Chart 8 Conclusion: Suppose that Americans would be more inclined to have health insurance amid ongoing rising medical costs (chart 4). Or suppose that UNH would break its strategy by implementing higher pricing for its premium (chart 3). That would further increase its EVA, although unlikely to be significant, especially if the main driver is more customers, not higher pricing. It would still struggle to achieve EVA momentum above 0.5%. On the other hand, with UNH current share price at $419/share, investors are expecting EVA momentum of 0.7% for at least another ten years (chart 8). If the management could meet that expectation, UNH would add almost double NPV (Net Present Value) to its present NPV (chart 6). In other words, an additional $204 Billion in current cash.  So that is the expectations placed by investors currently. Pretty optimistic, if not unrealistic, I might say. At the very least, UNH needs to demonstr...