Institutional Quality with a Private Client Experience
"The stock market is a device for transferring money from the impatient to the patient." - Warren Buffett
Successful investing over a sustained period of time requires a well-defined, simple discipline that is based on sound fundamental research. Our mission is to deliver superior risk-adjusted returns which will enable your financial plan to unfold as it is intended to. We will ensure that you adhere to the rational process through volatile market cycles so as to protect your hard-earned capital.
Quality businesses only
Our stock selection approach focuses on identifying good quality businesses. "Quality" is arguably subjective. We define "good quality" as companies having many of the attributes below.
- Sound business models with good visibility
We prefer to invest in companies whose costs, volumes, and pricing are relatively straightforward to understand and are improving. We value predictability based on track record and put special emphasis on traits such as strong pricing power and rising backlogs, which are indicative of future revenue generation potential. We look for manageable competitive risks both from within and outside the industry, and prefer companies with flexibility in their cost structures that can help them respond to changing market dynamics.
- High return on invested capital
We believe companies that have been successful at delivering industry-leading returns on capital are often the same companies whose stocks have outperformed for shareholders over the long term.
We want to have confidence in the team running the company and making decisions on behalf of minority shareholders. We look for a stable, deep management team with a demonstrated track record of delivering on growth expectations, efficiency in allocating capital, and successful execution of projects and initiatives.
- Reasonable financial leverage
We prefer companies that have strong balance sheets to ensure debt levels are sufficiently covered by earnings and assets.
- Robust cash flow generation
The ability of a business to generate consistent cash flow is an important attribute, in our view, particularly once major capital expenditures are taken into account. Consistent and rising free cash flow (after expenditures) can often leave companies well-positioned to pursue initiatives that can benefit shareholders, including share repurchases, higher dividend payouts, organic growth opportunities, and acquisitions.
