“Buy not on optimism, but on arithmetic.”
-Benjamin Graham
Our typical buy recommendation will exhibit some or all of the following characteristics:
Strong earnings quality where accounting headwinds may reverse
Hidden or underappreciated assets
Companies selling at or below intrinsic value
Built-in growth drivers such as a leading position to benefit from a secular growth trend, significant automatic lease escalations, or inflation-indexed revenue streams
Strong, defensible market positions with high barriers to entry allowing for sustainable growth and profitability
Healthy returns on capital that allow for both continued reinvestment in the business and growing distributions to shareholders
Manageable leverage financing projects with accretive returns
Misunderstood by the market or not in the major indices
Commitment to paying a generous and growing dividend to shareholders