Investment Philosophy
Research-Driven Value Investing
Fundamental Investment Management operates with a value investment philosophy focused on identifying good quality companies whose share prices do not reflect their true underlying value and medium to longer term prospects.
We use a fundamental, bottom-up approach to stock selection to identify stocks using a research-driven process which involves detailed financial modelling of the company’s forecast earnings for the next 2-3 years. This financial modelling involves segmenting the earnings streams of the various divisions within each company to understand what the key earnings drivers for the company are going forward.
Our research also involves a regular visitation programmme where we arrange regular meetings and discussions with the company’s senior management as well as wherever possible customers, competitors, suppliers and ex-employees of the company.
Our analysts also utilise a proprietary ‘North Star’ process which leverages AI to significantly improve research quality and to provide differentiated insights into the company being analysed.
We will look to populate the portfolio with companies that we believe look undervalued and that have the following characteristics:
- A resilient earnings stream
- Strong cash flows
- A strong and sustainable competitive position
- Appropriate debt levels
- An experienced and well-credentialed team
We are confident that our philosophy will lead to consistent returns over the long term with less volatility than the overall Index given the focus on good quality companies that are trading at what we assess as attractive valuations.
