We are big fans of quantitative investing strategies since it helps take human emotion out of the equation. While it’s relatively easy to build investment strategies based on numerical criteria such as valuation or growth rates, it’s harder when it comes to more subjective things like whether or not a company operates in a highly competitive industry. In theory, companies that operate in consolidated industries with little competition should have stable or increasing profit margins, earn higher returns on capital and thus generate higher stock price returns than companies that operate in intensely competitive industries.