Investment Philosophy
Investment Process
We look for good businesses with good management at a good price.
Good
Business
- Management that creates value for shareholders
- Family-owned Alpha Factor
- Alignment of interest
- Long term investment focus
- More efficient CAPEX, R&D and SG&A
- Management consistently do what they said are going to do
Good
Price
- 25% to 35% discount on its intrinsic value of the business:
- Free Cash Flow
- Sum of Parts
- Replacement Value
- Comparable Business
- Growth for free or cheap
- More active at extreme (valuation/sentiment) moments
Good
Business
- Strong balance sheet
- Steady generation of free cash flow
- Sound financial statements
- Competitive advantages and entry barriers
- Good margins
- Good ROE, ROIC
- Good reinvestment opportunities
- AM research
- Multi level company visits
- Sell-Side research
- Buy-Side ideas
- What to buy
- How much to invest
- When to exit
- Reach its intrinsic value
- Fundamentals deteriorate
- Better investment oportunity
- Concentrated Portfolio
- 60% difference vs IPC