At the heart of our strategy is a simple truth: In the long run the return on a stock will closely approximate the return on the business itself.
Kingwest owns resilient companies with unrecognized potential
We emphasize companies that are misunderstood or out-of-favour with investors. These companies have sound operational performance, but our in-depth research has identified room for substantial improvement and potential to add value that is not reflected in the stock price.
Our strength is staying focused on business fundamentals, not newspaper headlines.
Investment Process
Prior to investing, we work to develop a deep understanding of prospective investments long-term fundamentals and competitive strengths and weaknesses vs. leading peers, to form a clear view of the value creation potential over a 3 to 5 year period.
We assess potential by the size of the market opportunity, recurring cash flows and return on incremental capital employed. We assess financial risk by balance sheet strength. We assess valuation risk by weighing price against business value.
Portfolio Construction
Kingwest build concentrated portfolios of c. 25 companies. Our portfolios do not mimic the index. We commonly own companies for 5 years or more. We equally weight companies at time of purchase. And we don’t dilute our best ideas by over-diversifying.
Experience has taught us that investing in companies with these characteristics stacks the risk/reward deck in our favour.
