Investing In Efficient Operations

One very important aspect of trying to find the best stocks to invest in is finding ones that are able to be efficient with their operations. Some companies such as Coca-Cola (KO) and Pepsi (PEP) have been able to streamline their operations so much that it becomes very difficult to compete with. Those obviously become good investment possibilities.

Another option is looking for companies that are able to offer such solutions in order to help their clients improve and thus become highly valuable. One company that has been able to do this is Lloyds which has been offering sensible commercial finance helping its clients improve efficiency. When I look at different financial institutions, I’d much rather look into ones that have a business based around clients rather than those that manage funds and try to reinvest the funds at a profit, it’s just much more stable. In what ways can this be done?

keeping your finances fluid with invoice factoring
-offering risk solutions
-offering execution (currency hedging, etc)
-consulting services (efficiency, human resources, etc)

Banks such as Citi for example are largely built around client operations while other names like Blackrock are more geared towards fund management. Client based businesses tend to much much more stable over time and while the margins are typically lower, it’s fair to say that it’s still a much more attractive way to generate revenues and profits.

Do you tend to pay attention to where revenues come from for stocks you’re considering?