Generally fund managers key skill is buying and selling stocks in order to “outperform” their peers, or an index. They hold stocks for relatively short periods, on average a year or less, and timing is all important.
We do something different. At Kingwest, we aim to excel at being a good owner of businesses. The key skill necessary is identifying companies with the potential to compound in value over years, not months or quarters.
We originate our own research and continually engage with management to develop in-depth knowledge of key differentiators that drive winning companies.
The key to compounding value is competitive advantage. In order to gain a competitive advantage in our business, we must have an insight that either the market doesn’t have, or it isn’t in the stock price.
We assess securities based on the prospects for each business: the size of the market opportunity, the visibility of cash flow from existing assets, and the return on incremental investments. We assess valuation risk by constantly weighing price against value. We assess financial risk by balance sheet strength. Experience has taught us that investing in companies with these characteristics stacks the risk/reward deck in our favour.
Our “house style” emphasizes mid to large size companies with resilient business models. We commonly maintain investments for 5 years or more. Our portfolios are concentrated and differ markedly from market indices. We don’t dilute our best ideas by over-diversifying.
We don’t wish for success, we plan for it. Sustainable business value. Proven, capable leadership. Price matters. This time-tested strategy will continue to drive better returns with less risk, making Kingwest a secure home for your assets.
