The team seeks to invest in companies that possess franchise characteristics, are benefiting from an accelerating profit cycle and are trading at a discount to the team's estimate of private market value. The team’s investment process focuses on two distinct elements—security selection and capital allocation. The team overlays its investment process with broad knowledge of the global economy.

Security Selection

The team seeks to identify companies that have franchise characteristics (e.g., low-cost production capability, possession of a proprietary asset, dominant market share or a defensible brand name), are benefiting from an accelerating profit cycle and are trading at a discount to its estimate of private market value. The team also assesses key environmental, social and governance (ESG) issues that could impact future stock returns. The team looks for companies that are well positioned for long-term growth, which is driven by demand for their products and services at an early enough stage in their profit cycle to benefit from the increased cash flows produced by the emerging profit cycle.

Capital Allocation

Based on the team’s fundamental analysis of a company’s profit cycle, it divides the portfolio into three parts. Garden^SM investments are small positions in the early part of their profit cycle that may warrant more sizeable allocations as their profit cycle accelerates. Crop^SM investments are positions that are being increased to a full weight because they are moving through the strongest part of their profit cycles. Harvest^SM investments are positions that are being reduced as they near the team’s estimates of full valuation or their profit cycles begin to decelerate.

Broad Knowledge

The team overlays the security selection and capital allocation elements of its investment process with a desire to invest opportunistically across the entire global economy. The team seeks broad knowledge of the global economy in order to find growth wherever it occurs.

In-depth Investment Process