A proven approach to investing
Our signature style of value investing has been honed over three decades and has resulted in several awards for industry-leading mid- and long-term performance.
While investment specifics may vary by mandate to meet unique client needs, our core value investing principles underlie all of our investment solutions and we never deviate from our style. Our investment process is research-intensive and, with a focus on undervalued stocks, inherently risk-sensitive. Our goal is to deliver top-quartile risk-adjusted returns over the long term.
Screening - what we look for
To identify candidates for investment, we concentrate our efforts on fundamentally-sound companies trading at discounts to their intrinsic values. We look for businesses with strong track records of performance that are temporarily undervalued due to some short-term event or phenomenon. They have a solid history of cash flow generation, profitability, high return on equity, strong margins or earnings growth, but are trading at a discount relative to their own historical valuations, or those of peers or the market.
Security selection – choosing where to invest
Our investment process is primarily fundamentals-based. We focus on facts. Once an investment candidate is identified, we perform extensive analysis of its industry, competitive position, management, business and operations, and an exhaustive review of its financial health. We want to know our companies better than our competitors. Companies that are selected for our portfolios are well-managed market leaders. They are financially stable with balance sheets that are strong or showing improvement. They are high cash flow generators and catalysts exist to improve their stock valuation. We only invest when we have full information, access to company management, and there is sufficient liquidity to enable us to add to or reduce exposure to the stock. Our investment decisions are informed and we avoid undue risk.
Portfolio construction – putting the pieces together
Portfolios we manage are highly concentrated. They comprise our best stocks and we want every position to have a meaningful impact on returns. We are however careful to ensure that as core investments, our portfolios are well-diversified. We take a prudent approach to managing individual security and sector exposures, and we continually monitor the stocks in our portfolios to ensure their ongoing suitability. Cash, foreign content and foreign currency hedging are used strategically to help manage risk.