Based in Toronto, Canada, our team has a long track record of successfully managing North American equity portfolios. We invest in the strategies we manage alongside our clients.
- Collegial, systematic, iterative and repeatable
- We are strongly committed to understanding a wide variety of outcomes for the stocks we follow, based on scenario analysis leading to favourable risk/reward trade-offs, and seeks to deliver strong risk-adjusted results over the long-term
Checklist
We use an initial checklist that rewards characteristics that many good stocks have in common while penalizing those that many likely poor performers share.
Fundamental analysis
We use fundamental analysis to focus on good quality companies with attractive returns on capital and appropriate financial and operating leverage.
Scenarios
We understand a range of fundamental scenarios for each position and avoid anchoring positions around a single forecast.
Technical analysis
We have a strong appreciation for technical analysis, utilizing both absolute and relative strength as a foreshadowing of potential shifts in the stock market.
Construction
We construct the portfolio to reward good stock selection and avoid heavily relying on the correctness of a strong point of view.
Decision-making process
Our decision-making process is ongoing and continuous.
1 Certain strategies do not integrate ESG factors, including but not limited to money market strategies, index strategies and certain third-party sub-advised strategies.
Portfolio positioning – structured according to opportunity
We think about companies in three buckets: those with stable cash flow, higher growth than their peers and sensitivity to the business cycle.
Companies that pass our “good company” checklist are put on this grid. We build portfolios from the “Opportunity” and “Fairly Valued” boxes, which include companies trading at below-average valuations on pessimistic earnings valuations. We avoid companies trading at a high multiple on an optimistic earnings outlook, as there often isn’t much upside optionality available.
Forward Earnings
Valuation Range
| Below average | Average | Above average | |
|---|---|---|---|
| Optimistic case | Caution | ||
| Base case | Fairly Valued | ||
| Pessimistic case | Opportunity |
Fair value generally grows with passage of time unless buiness is facing structural or competitive decline