Focusing on Fundamentals

We treat each prospective investment as though we are buying the entire company – as such, we strive to apply a meticulous, comprehensive and proper valuation analysis to every investment that we make.

Security prices reflect the market’s perception of each company’s current and future prospects. Invariably, the cone of uncertainty around expectations widens as investors look farther into the future. The goal of our research is to narrow the cone of uncertainty by thoroughly understanding each prospective investment’s fundamentals: including its unique competitive positioning, operating dynamics, profit trends, risks, reinvestment needs, and growth opportunities.

Relying on thorough research to more accurately forecast a company’s prospects is only one part of our investment approach. Each prospective investment is also evaluated on the basis of the key building blocks of valuation: growth, risk, and the amount of cash flow that can be returned to owners in the form of dividends and buybacks. Understanding these core elements of valuation enables us to determine how uncertainty around a company’s current and future prospects affects the asset’s fundamental value today and at various time points in the future.

Importantly, our in-depth analysis and valuation work provides a framework for us to make investments based upon a multi-year time horizon, which benefits clients by increasing tax efficiency and providing the opportunity to extract maximum profit from our proprietary research.