Value Is About Perspective.
So many equity investors focus on near-term earnings and market developments. We investigate and analyze the companies we own for our clients part-by-part and from the bottom up to identify long-term shareholder value. Our research is proprietary and driven by the conviction that the durable free cash flow a company generates is the best predictor of long-term worth.
Company Value Can Be Destroyed By Poor Management.
Frequently, quantitative driven investors ignore that companies are run by people. We believe a thorough understanding of a company’s value potential for shareholders combines both rigorous quantitative analysis and a nuanced assessment of management teams, operating vision and execution capacity. Competence, compensation structure, insider ownership and overall alignment with shareholders are key indicators of whether a valuation mis-match we identify presents an investment opportunity or is simply an accurate reflection of a broken company.
Deep Value Opportunities Require a Longer Horizon.
Our goal is to invest in companies at price points that reflect a 40% to 50% discount to fair value. When businesses trade at these levels of discount, we understand that there is a reason. We are comfortable with multi-year investment horizons to allow for business operations to improve and the valuation gap to begin to close. Our multi-year investment horizon (frequently 3 – 5 years) also results in lower overall trading costs and a tax efficient portfolio.