PCM Services
INVESTMENT APPROACH
________
Step 3
Learning all we can first-hand about the quality of management.
Once we are satisfied with a company's financials, our next step is to learn all we can about its management and other qualitative factors by:
- Contacting members of senior and middle management, to gain an initial impression of management's quality and operating philosophy,
- Assessing their competence and commitment to creating shareholder value, and
- Interviewing key customers, competitors and suppliers to gain their perspectives on market and competitive factors affecting the outlook for the business.
Most importantly, we generally hold in-depth conversations with company management to gain first-hand insights into intellect, motivation, operating philosophy and style. We learn about business priorities, spending practices and compensation policies.
These contacts are invaluable in confirming the potential we have identified through our financial analysis and in allowing us to evaluate the CEO, CFO and the senior management team. We immerse ourselves in the company. We pick up signals and pursue issues that would be difficult, if not impossible, to identify through Wall Street research or financial analysis alone.
