We invest in companies with high long term value creation. We look for high return on invested capital which allows for reinvestments at high returns and dividends. Companies we invest in should have a strong market positions and high barriers of entry as well as high margins giving earnings stability in downturns.
We initiate short positions in companies with a misunderstood earnings outlook. Typically the business model is impaired with lower returns in the future. We look for companies where growth cannot be funded by internally generated cash flows or where earnings are temporarily boosted by accounting.
In order to achieve our mission of a good risk adjusted return we invest in, what we believe are, stable companies. With our long term investment horizon we believe that environmental, social and governance (ESG) issues can affect the performance of our portfolios and adherence is a necessity for long-term value creation.