Our direct equity portfolio is deep value-driven. We are grounded in the belief that value eventually prevails over time and will be reflected in the price. Augmented by our home-grown application, ACE, that enables us to track dividends, corporate actions like rights issues and stock splits, we present a bird’s eye view of your investments performance in relation to your goals.
Seven key criteria drive our investment assessment of each company.
We prefer companies where the price trades lower that of its worth in terms of tangible assets after paying off all debt. With this approach, we are more assured that even in a fire sale of assets, we should still get a better price than cost because of its inherent value. The quality and reliability of the assets is our primary focus.
Dividends enable us to secure a return on your capital while waiting for the share’s value to unlock (rise to that of its true worth). While the company’s share price could be weak in the interim, dividends received provide a decent yield pending our exit at a gain at a price closer to its NTA.
Companies with low debt secure two benefits of prudence. Firstly, creditors have no influence over its finances because of their inability to fulfil borrowing terms. Secondly, unfavorable interest rates and rising borrowing costs have no direct impact on its operations.
A low liquidity company may not secure the last traded price because of the lack of volume. Equally, suppose the public float falls below the minimum set by the local Exchange. In that case, it may be suspended or forced into privatisation. Oddly, while these can sometimes lead to profitable outcomes, knowing the company’s typical liquidity level has bearing on our portfolio management decisions.
While forecasting the future is inherently uncertain, it is necessary to assess how the company could fare in given circumstances. Because we invest for the long term, it is not uncommon for us to take contrarian positions to mainstream opinions and assessments.
A low liquidity company may not secure the last traded price because of the lack of volume. Equally, if the public float falls below the minimum set by the local Exchange, it may be suspended or forced into privatisation. Oddly, while these can sometimes lead to profitable outcomes, knowing the typical liquidity level of a company has bearing on our portfolio management decisions.
The market has an unhealthy fixation on profit regardless of financial fundamentals, performance, or even ethics. Markets’ reaction to events may only cause a short-term impact, thus creating opportunities. Our holistic understanding of the company enables us to identify mispricing opportunities to enter, exit or hold.