Value Creation Awards 2011-2021

Every year since 2007, Value Square has calculated the fundamental value creation over the past ten years of all Belgian companies that have also been listed on the stock exchange for at least ten years. Their performance is compared to that of Berkshire Hathaway, Warren Buffett's investment vehicle. Over the period from the end of 1964 to the end of 2021 - Buffett was able to increase the book value of his holding company by an astronomical rate of 1,762,634% (in USD) or 18.71% per year and for 57 years. In doing so, he more than beats the S&P 500 return index, which rose "only" by 30,209%, yielding a return of 10.5% per year. Since 1964, Berkshire Hathaway's stock price rose 3,641,613% or 20.1% per year.

The evolution of book value is a good indicator of the evolution of intrinsic or "real" value. In our study, we assess the fundamental value creation using the following formula: we calculate the evolution of the book value per share (end 2021 compared to end 2011) and add the net dividends received by a private shareholder over the past 10 years. The book value per share is obtained by dividing consolidated equity (group share) by the number of shares at the end of the year (excluding treasury shares). Furthermore, we make adjustments for capital increases at prices above book value (of the fiscal year preceding the capital increase).

Such analysis of fundamental economic performance over at least 10 years, by the way, is one of the pillars on which Value Square assesses the quality and risks of all the publicly traded companies it follows.

This fundamental analysis approach is independent of the evolution of stock prices, over which a manager has no control. The track record of managers is therefore better evaluated by the evolution of fundamental figures. Stock prices are strongly influenced by emotions in the short term. In the long term, of course, stock prices must follow or preferably exceed the evolution of the underlying fundamental value, as is the case at Berkshire Hathaway.

For the eighth consecutive year, Value Square awards prizes to the three highest-scoring companies in this study, and management is presented with a gold, silver and bronze "Value Creation Award." Due to the corona pandemic, the annual physical event of the "Value Creation Awards" could not take place in 2020 and 2021. This year we are pleased that the event does take place on Monday, May 16, 2022 at the Handelsbeurs on the Kouter in Ghent.