International Select
A flexible, research-driven, mid-to-large cap strategy with an attractive risk/return profile, managed by a stable, experienced team since 2001
- Seeks differentiated mid-to-large cap quality businesses with an enduring competitive advantage trading at reasonable prices (QuaRP)
- Disciplined investment approach focused on strategic fundamental analysis and valuation assessment
- Comprehensive risk management embedded in portfolio construction and oversight processes
Overview
Investment Philosophy
Believe fundamentally-based research process can identify potential outperformers:
- Quality companies: Returns of 1.5x cost of capital, organic growth, strong balance sheets
- Reasonable price: 50% appreciation potential over 3 years
Investment Process
Screens narrow the universe to a manageable set of companies that undergo in-depth analysis
Investable Universe
- Companies domiciled outside the U.S. with market cap > $2.5bn and > $5mm daily liquidity
Quality Track Record
- Profitability: ROIC > 12%1
- Financially Strong: Net Debt/EBITDA 2.5x for non-financials
- Growing: EPS Growth > 5%
Strong Outlook
- Industry and competitive positioning analysis
- Historically averaged approximately 1,000 company meetings annually; 50+ weeks of travel to international markets
- Meet with competitors, suppliers, clients and regulators
Undervalued
- Proprietary discounted cash flow model to identify 50% upside potential over 3 years
- Analyze sensitivity to core revenue, margin and cap-ex assumptions
- Consider other valuation metrics: P/CF; P/E; P/BV; EV/EBITDA
QuaRP Portfolio
- Measure risk at the security and portfolio level
- Position size based on potential upside and level of conviction
- Typical 30-50% turnover
1For financials the team looks for sustainable ROE > 12%.
Management
Elias Cohen, CFA
Thomas Hogan, CFA
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