Our process of finding stocks for our portfolios is straightforward:
- Our wider universe is screened on the basis of liquidity and/or market cap to provide an active universe of stocks.
- This active universe is screened further on the basis of profitability, return, debt, valuation and other metrics to generate stock ideas for further analysis.
- Independent due diligence is carried out on these stocks/companies including direct interaction with the company.
- In-house models allow us to determine a valuation for these stocks.
- Research notes are written; investment cases are discussed; and additional work is carried out addressing issues raised.
- It is then at the lead manager’s sole discretion whether or not a stock is bought for the portfolio. Investment decisions are made subject to continual portfolio and macroeconomic risk management.
- Stocks may be sold for the following key reasons:
- Corporate governance issues
- The investment thesis is no longer intact (i.e. profits warning)
- Macroeconomic risks