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The emerging markets equity team at Lazard employ stock screening of historic return drivers like price to sales and PE to help identify new ideas. The team then undertakes accounting validation to normalising earnings and standardise different accounting practices. There is also proprietary modelling of company financials in the 3 years ahead and target prices are set. They look for a minimum of 25% upside before a stock will be considered for the portfolio construction stage. Stock target prices are discounted for political risk (20% weight), portfolio risk (20%), corporate governance risk (40%) and macro risk (20%). Each factor scored 1 to 10 where higher scores result in a lower discount. Assessment of underlying risks is pragmatic, although historically this has tended to lead Lazard to a more cautious approach.