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"Thanks for doing the math. 18% isn't bad at all, but how can this be used to judge if the stock is either fairly valued or overvalued? I've been reading up on ROIC, getting ready to try to put it to use, but I've missed the relationship to value somewhere."

I'm not sure if there is a relationship between ROIC and valuation. It is just used as a measure of management's effeciency to leverage the capital at their disposal. Indirectly, a company whose ROIC is declining should tell you that there are possibly more problems beneath the surface.

I'll post my analysis of CREE's financials separately.


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