Our investment strategy is centered on achieving long-term capital appreciation by employing a meticulous in-house research and analysis process. This involves gaining a comprehensive understanding of a company's value in relation to other available opportunities. At Dean Ryle, we prioritize risk management and incorporate it into our portfolio construction.

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Our strategy focuses on investing in U.S. companies primarily through the acquisition of common stock. We seek out public companies that exhibit specific characteristics:

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1. High Free Cash Flow to the Firm (FCFF) relative to the stock price: We target companies that generate excess cash beyond their annual capital requirements compared to the stock's price, often referred to as free cash flow yield.

2. Low volatility in FCFF: Ideally, the companies we invest in display stable and predictable cash flows, providing a level of certainty.

3. High growth in FCFF: We look for companies with a track record of increasing free cash flows over time, indicating their ability to grow.

4. High growth in operating revenues: We seek companies that demonstrate consistent growth in their operating revenues.

5. Simple and easy business models: We refrain from investing in companies that we cannot explain in relatively simple terms, favoring clarity and transparency.

6. Dominant position in the industry: We target companies that have weathered economic downturns and emerged stronger, establishing themselves as leaders in their respective industries.

7. Superior returns on capital: We favor companies that achieve high margins and deliver exceptional returns on invested capital.

8. Sustainable competitive advantages: We seek out companies with competitive advantages that shield them from competition and enable management to raise prices above inflation without sacrificing market share.

9. Strong balance sheet: We prioritize companies with moderate levels of leverage and a robust financial position.

10. Quality management: We seek companies with a proven track record of outstanding performance, led by management that exhibits honesty, intelligence, and integrity.

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By adhering to these criteria, we strive to construct portfolios that have the potential for long-term success and deliver favorable investment outcomes for our clients.