Despite all appearances to the contrary, this is an article about investing – not baseball. So, to those of you who love reading about investing but hate reading about baseball: don’t be deterred. It’s worth reading all the way through.

Return on assets is the hit by pitch of investing. Common sense suggests it isn’t a very important measure. Why would any investor care about return on assets when return on equity and return on capital tell you so much more?

You don’t have to know a lot about baseball to know that the number of times a batter is hit by a pitch shouldn’t tell you much about his value to the team. After all, getting hit by a pitch is a fairly rare occurrence. Even if some players are truly talented when it comes to getting plunked, they still won’t get hit enough to make a huge difference, right?

That’s true. In and of itself, the act of getting hit by a pitch is not particularly productive. But (and here’s where things get interesting), as a general rule, a simple screen for the batters who get hit most often will yield a list of good, underrated players.

Why? The most likely explanation is that a HBP screen returns a list of players who are similar in other, more important ways. Perhaps batters who get hit more often also tend to walk, double, homer, and fly out more often – while grounding into double plays less often. Even a casual baseball fan might suspect this.

Since this article is about investing rather than baseball, there’s no reason for me to discuss whether such a correlation really does exist. I’ll just provide a list of the top ten active leaders for HBP: Craig Biggio, Jason Kendall, Fernando Vina, Carlos Delgado, Larry Walker, Jeff Bagwell, Gary Sheffield, Damion Easley, Jason Giambi, and Jeff Kent.

After the top ten, the list is no less impressive. #11 – 15 are: Derek Jeter, Luis Gonzalez, Alex Rodriguez, Matt Lawton, and Barry Bonds. Since this list is based on career totals for active players, it's biased towards players who remain in the majors and who get a lot of plate appearances. That fact alone means the guys on this list are likely going to be above average players. However, even if you look at the single season HBP list, which includes a few young players (e.g., Jonny Gomes), the guys with high HBP totals still tend to be extraordinarily productive offensively.

Simply put, screening for HBP tends to return a much higher number of “bargain” batters than you’d expect. One explanation for this is that the good things players with high HBP totals do tend to be less conspicuous than the good things other players tend to do.

Might there be a parallel in the world of investing? You bet. So, again I say -

Return on assets is the hit by pitch of investing.

Return on assets is a good screen for high – quality, low – profile businesses. A high return on equity does not go unnoticed for long. Sometimes, a high return on assets does. Jakks Pacific (JAKK) is one good example of a high ROA stock. Its returns have basically been what you’d expect from a toy company. That may not sound like great news to owners of Jakks; but, it is.

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