We strictly adhere to following a sensible investment approach where we look for quality companies with robust fundamentals and the ability to grow across business cycles leading to attractive return on investment.
We consider the following parameters in our stock selection process:
FINANCIALS
Businesses with credible and long track record of profitability
Strong predictable cash flows
Sustainable high return on capital
Healthy profit margins and strong balance sheet
Low leverage and earning consistency
MANAGEMENT
Capable and honest management
Optimal capital allocation
Business decisions based on long-term focus
Innovation plays a key role
Shareholders’ interests taking priority
BUSINESS
Companies that are leaders in their sectors
Businesses with strong franchises
Strong entry barriers
Companies in non-cyclical industries that are less sensitive to disruption
Sustainable long term business model
Companies with strong growth potential and an economic moat
WHAT WE DON’T DO?
Momentum trading
Debt investments
Derivatives
Technical analysis
Timing the market
Over-diversifying
WHEN DO WE SELL?
We trigger a ‘sell’ call when any one or more of the following 4 reasons arise:
There is an adverse permanent change in the long term fundamentals of the business;
An alternative superior investment opportunity is identified.
Valuations of stocks in our universe become too expensive and it makes sense to book gains.
Our original stock-screening parameters no longer stand valid in relation to the stock under review.
