Our Active Investment Strategy
A Disciplined Research Process
Our investment strategy incorporates a disciplined research process intended to include a thorough understanding and analysis of each company's fundamental and intrinsic value, coupled with an appreciation for the macro environment, economic cycles, and other key factors such as public policy, industry, and political developments. We take a directional view utilizing our deep knowledge of companies and industry sectors and leveraging our analysis performed on one investment to make other investments.
We Look For Companies That Exhibit These Characteristics
High free cash flow generation relative to the price. Companies that create excess cash over and above the business’ annual capital requirements.
Low volatility in free cash flows. Ideally, companies will display low volatility of cash flows, which provides a level of certainty.
High growth in cash flows. Free cash flows should display growth over time.
Simple and easy business models. We never invest in any company we can’t explain in relatively simple terms.
Dominant in its industry. Companies that have been through periods of recession and emerged stronger.
Superior returns on capital. Companies that achieve high margins.
Sustainable competitive advantages. These protect the company from the competition and allowing management to increase prices above inflation without losing market share.
Strong Balance Sheet. Companies with sensible gearing levels.
Quality Management. Companies with a proven track record of outstanding performance. Management should display honesty, intelligence, and integrity.