Fundamental Analysis

The risk-averse investment approach favours stable and predictable businesses that help reduce the portfolios’ downside risk. The risk premiums used in the valuation are related to the level of earnings stability where more volatile earnings require substantially higher risk premiums.

Determining a business’ fair value entails thorough evaluation of fundamentals, industry trends, competitive forces, and the economic environment. Based on in-depth research, an estimate for the true earnings power is derived and capitalized to calculate the fair value of a company on the basis of a going concern.

Teamwork is an essential part of the entire investment process. Views and perceptions are constantly challenged by the team members in a dynamic environment where ideas thrive and can be openly discussed. The open-minded teamwork and strong investment culture are key to improved stock selection and investment results.

Businesses identified as attractive are likely to display one or more of these favorable characteristics: solid earnings power and free cash flow generation, sustainable business models and competitive advantages, low debt levels, flexibility to restructure inefficiencies, potential to benefit from consolidation within their industries, and ability to gain market share from competitors. In addition, these businesses will typically have identifiable triggers that unlock their underlying value within their operation, capital structure, or in the market environment itself.