Our Equity Philosophy - Growth
Our Objective
To deliver superior returns by investing in companies we expect to grow at above average rates at attractive valuations.
Our Process
To construct diversified portfolios that provide an appropriate risk/reward profile for each client, we employ a consistent, disciplined investment process based on fundamental, bottom-up security analysis focused on the following factors:
- superior earnings profile
- strong financial position
- sustainable competitive advantages
- attractive industry profile
- other catalysts
- valuation — valuation metrics include price/earnings, price/cash flow, EV/sales, EV/EBITDA and price/NAV
Our Equity Philosophy - Value
Our Objective
To deliver positive returns by investing in businesses expected to generate a growing stream of distributable cash flow when those businesses are purchased at a discount to our estimate of fair value.
Our Process
We believe the fair value of a business is entirely dependent on the distributable cash flows it will generate over time, discounted at an appropriate rate. It is extremely difficult to estimate the fair value of a business that does not generate distributable cash flows on a consistent basis. With value investing, we can reasonably assess the "value", which means that we allocate all of our research efforts to identifying and monitoring businesses that have demonstrated a strong capacity to generate and grow distributable cash flows. We implement this process by:
- identifying great cash generating businesses that we can value with reasonable confidence and monitor these businesses on a watch list; we screen for resilient profit margins, steady sales growth and high free cash flow generation
- estimating the fair value of each business and updating as new information becomes available
- buying identified businesses when circumstances result in those equities trading at compelling entry points
- maintaining reasonable sector and global diversification
Our Equity Approach
- value, growth and small, mid-size and large companies in Canada and the U.S.
- North American small to mid cap approach
- International equities including Pacific Basin, Europe and Emerging markets
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