Bestinvest says
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Invests in equity securities of high quality US & Canadian companies. Bottom-up investment approach – market capitalisation or indices are not used for portfolio construction. Turnover is typically less than 25% per year as they have a ‘buy’ & ‘hold’ approach. Initial screen is for companies capable of 20% wealth generation eg using metrics for cash ROI, ROE and EPS growth. Then they do intensive financial analysis on seven areas of investigation: (1) product / franchise (market position, sustainable margins); (2) Industry (competitive structure, industry dynamics); (3) Competitive position (price leadership, cost control); (4) Profitability (cash flow, cash return on investment); (5) Financial model (accounting, balance sheet, working capital); (6) Management (experience, track record); (7) Marketability (free float, trading volume). Meetings with company management are integral to the process. Investment proposals that make it through this process are reviewed by the entire team - BUYs require unanimous approval, whereas SELLs just need one strong dissenting voice.