Many investors don't know much about return on invested capital. But you might want to look at it, because ROIC reflects how effectively a company is investing the money at its disposal. The higher the number, the better.

Of course, as with any metric, it's not enough to consider ROIC on its own. The more numbers you crunch and the more information you digest, the better understanding you'll have of the company, its health, and its prospects. But if you want to get the biggest bang for your buck from high-ROIC companies, then you might want to focus on younger, smaller companies.

As Passport Capital hedge fund founder John Burbank noted last year, "One of the keys to Warren Buffett's early success was investing in high return on capital consumer businesses that were relatively immature when he bought them and that grew enormously along with the U.S., the largest economy in the world."

Hmm. That seems doable: Looking for companies in their youth with high ROIC numbers and relatively low market caps. And it's silly to not look into any investing advice Mr. Buffett has offered. Here are some contenders I found when screening for those criteria:

Company

CAPS Stars(out of 5)

Market Capitalization

ROIC

Hansen Natural (Nasdaq: HANS)

****

$3.3 billion

24.9%

Sohu.com (Nasdaq: SOHU)

****

$2.6 billion

26%

Mindray Medical (NYSE: MR)

*****

$3.4 billion

12.8%

Netflix (Nasdaq: NFLX)

**

$2.6 billion

25.4%

IMS Health (NYSE: RX)

***** Continued...