What to Look ForHere's my first cut at what to look for in this low-interest-rate environment. Seek companies:
- that face as little pricing pressure as possible from excess capacity at competitors;
- with strong balance sheets that can raise capital cheaply;
- that have lots of opportunities to put that cheap capital to work;
- whose new projects earn returns as high as possible over the cost of the new capital that funds them; and
- whose new projects show returns that are not significantly lower than those for the company's existing businesses.