We identify and invest in companies that we believe are temporarily undervalued but possess outstanding business characteristics and strong management teams. Our investment philosophy centers on the belief that even well-run businesses do not grow and develop in a straight line. This pattern can lead to volatility in the stock price – and the opportunity to acquire shares at a discount relative to the company’s intrinsic value. Such undervaluation can be caused by a number of reasons, including transition events, temporary pressure on the sector, poor recent business performance or other external factors. We believe that, over time, a business will be valued based on the cash flow that it generates, management’s ability to allocate and invest capital wisely and the strength of the company’s balance sheet.
We utilize our disciplined approach to identify what we believe are strong investment targets and to determine optimal timing for investment. We sometimes follow companies for years before determining that the investment timing is right.