Berkshire requires a 25–50% discount to intrinsic value before buying.
Buffett Quality Checklist
✗ROE >15% consistently (≥7 of last 10 years)
✓Free cash flow positive (≥8 of last 10 years)
✓Conservative leverage — Debt/Equity below 1
✗Revenue growing at CAGR >5%
✗EPS growing at CAGR >5%
10-Year Financial History — SEC EDGAR 10-K Filings
Year▲
Revenue▲
Net Income▲
FCF▲
Owner Earnings▲
ROE▲
Net Margin▲
LT Debt▲
Cash▲
2016
$4.7B
$854.2M
$506.3M
$807.7M
11.4%
18.0%
$2.1B
$1.3B
2017
$5.2B
$1.1B
$1.0B
$1.1B
13.0%
21.8%
$2.1B
$2.0B
2018
$5.3B
$882.8M
$726.3M
$922.4M
10.3%
16.6%
$2.4B
$1.1B
2019
$6.1B
$564.7M
$992.3M
$618.0M
4.1%
9.2%
$2.1B
$1.0B
2020
$6.1B
$524.8M
$1.1B
$613.3M
3.7%
8.5%
$2.1B
$1.4B
2021
$6.9B
$1.4B
$969.3M
$1.5B
9.0%
20.2%
$2.1B
$1.9B
2022
$6.0B
$683.9M
$510.3M
$686.3M
4.5%
11.3%
$1.5B
$1.2B
2023
$5.7B
-$333.7M
$1.1B
-$315.2M
-2.3%
-5.8%
$1.5B
$1.5B
2024
$6.1B
$538.0M
$1.1B
$648.5M
3.7%
8.9%
$890.6M
$986.5M
2025
$6.4B
—
$1.4B
—
—
—
$1.8B
$1.0B
Warren & Charlie
Buffett / Munger — quality, moat & valuation
Invesco Ltd. (IVZ) — Investment Memo
🐂 The Bull Case (Warren's voice)
The Cash Register Doesn't Lie: While the P&L is a mess of non-cash write-downs, the business is a cash-generating machine. $1.1B in FCF against a reported $0.5B Net Income suggests the market is ignoring the actual liquidity being produced.
Asset-Light Scalability: It is a low-capex business. Once the infrastructure is built, adding another billion in AUM costs almost nothing. It's a game of operating leverage, provided they can stop the margin bleed.
The "Boring" Recurring Stream: Despite the noise, the revenue is derived from fees. It's not a one-time sale; it's a persistent clip of the ticket.
Attractive Entry: This becomes a Berkshire-style "cigar butt" if the price reflects a liquidation value rather than a growth story. To be genuinely attractive, we need to buy it at a price where the FCF yield is so high it offsets the structural decline.
🐻 The Bear Case (Charlie inverts)
The "Beta" Meat Grinder: We are witnessing the commoditization of investment management. Invesco is selling a premium product (active management) in a world that has discovered the "generic" version (index funds) is better and cheaper. They aren't fighting a competitor; they are fighting a mathematical shift in investor behavior.
The Margin Death Spiral: Margins crashing from 21.8% to 8.9% is not a "temporary headwind"—it is a structural collapse. When your pricing power vanishes, you aren't a toll booth; you're a commodity vendor in a price war.
The Illusion of Switching Costs: Management claims investors are "sticky." In the digital age, switching an advisor or a fund takes a few clicks. The "moat" is actually just inertia, and inertia is not a competitive advantage.
Likeliest Failure: A permanent "slow bleed" of AUM as the active-to-passive migration accelerates. Timeframe: Now, and continuing for the next decade.
💰 Valuation & Margin of Safety
The DCF is an optimistic projection of a stagnant business. We must penalize the terminal growth given the structural headwinds.
Intrinsic value estimate: $50.21 per share
25% margin of safety entry: $37.66(conservative)
50% margin of safety entry: $25.11(Buffett's ideal)
Current Status: Deeply cheap on a cash-flow basis, but fairly valued on a "dying business" basis. The gap between the reported loss and the $1.1B FCF is the only reason this isn't a total write-off.
Verdict: PASS
The cash flow is seductive, but the business is a sieve. We do not buy companies with cratering margins and a disappearing product-market fit, regardless of how "cheap" they look. There is no point in buying a cheap ticket to a sinking ship.
Other Analyst Views· Lynch · Damodaran
Research Notes· Money Model · Moat · Financials · Management
Data sourced from SEC EDGAR XBRL filings (10-K only). For educational purposes — not investment advice.