Our objective is to acquire companies when they are selling below their intrinsic value and to allow the underlying earnings growth to drive share prices higher.
Investment candidates tend to be distributed across major economic sectors. The commitment we make to a particular sector is based on our view of the opportunities and valuations within the sector, balanced against our desire to reduce risk and preserve capital. Generally, we try to maintain exposure to the major economic sectors; however if the risk of loss seems excessive, we will cut back or eliminate our position in a particular area.
Our equity holdings tend to be highly profitable, financially strong companies who are abundant generators of operating and free cash flow. We also look closely at a company’s record of capital allocation – companies that utilize their cash resources wisely tend to make better investments than those less disciplined.