The recent publication of world famous billionaire investor Warren Buffett's annual letter to shareholders of Berkshire Hathaway is a great reminder of why investing in a business run by a successful owner-operator can help you get rich.
While it's unlikely the following set of managers will create the level of investment returns achieved by Buffett, they could provide your portfolio with strong returns.
Here are four ASX-listed companies which are managed by their founders, all of whom have made millions (in some cases billions) for themselves and made some of their co-shareholders very rich in the process too…
- Graham Turner is a co-founder and the boss of Flight Centre Travel Group Ltd (ASX: FLT). The stock has provided total shareholder returns of 13.7% per annum over the past 10 years and the market capitalisation has grown to just over $4 billion. Turner owns approximately 15% of the company, valuing his share at over $600 million.
- James Packer has a massive 50% stake in casino group Crown Resorts Ltd (ASX: CWN). Packer's holding currently has a market value of around $5 billion!
- Pact Group Holdings Ltd (ASX: PGH) is a recent addition to the ASX and is run by founder Raphael Geminder. His investment vehicle owns 40% of Pact which has enjoyed a stellar gain of 24% since listing just over 14 months ago. The share price rally has increased the group's market capitalisation to $1.25 billion and the value of Geminder's holding to half-a-billion dollars.
- Andrew Forrest has successfully created the 'third force' in iron ore production in Australia via his Fortescue Metals Group Limited (ASX: FMG). In the process he has built himself a fortune with his 33% shareholding in Fortescue currently worth around $2 billion.
But is now the time to invest alongside these successful entrepreneurs?
Based on consensus data provided by Morningstar, Flight Centre is trading on financial year (FY) 2015 price-to-earnings (PE) ratio of 15.6x, Crown resorts on a FY15 PE of 17.5x, Pact Group on a FY15 PE of 14x and Fortescue on a FY16 PE of 22x.
Each stock could potentially offer compelling value for long-term investors depending on their view of the long-term growth potential and balance sheet strength of each company.
