Our Investment Strategy
We focus predominantly on investing in publicly traded equity securities. The foundation of our investment strategy is to identify compelling businesses that we can purchase at a price we believe is below intrinsic value, and to subsequently own these businesses for the long term. In identifying compelling businesses, we conduct extensive fundamental research to identity and invest in firms that possess many or all of the following quantitative and qualitative attributes: growing revenues with a significant runway for further growth, stable or improving margins, strong free cash flow generation, attractive returns on capital, long-term business model durability, low rates of change in their industry, a consistent operating track record, and management teams that are candid, transparent, intellectually honest, focused on metrics, and incentivized in a way that is aligned with investors.
Given the attributes we seek in businesses, our approach to price/intrinsic value, and our requirement that we thoroughly understand any company we invest in, client portfolios are likely to be concentrated in a limited number of positions. We believe that concentrating capital in what we believe are our best ideas yields the least amount of risk and the highest expected return over the long-term.
Our Approach
Finding Great Businesses
We don’t believe there are that many truly great businesses, so we dedicate a significant amount of time to identifying a small number of these opportunities.
Valuation Discipline
We try to avoid “following the crowd” into expensive stocks. Likewise, we aren’t looking for “deep-value bargains” in the market. We practice rational valuation discipline in search of finding reasonably priced securities with long-term growth potential.
Patient Buy-and-Hold Mentality
We hold stocks for the long-term, and are comfortable letting returns compound over time. We aren’t looking to “harvest our winners” just because they’ve done well in the past.