We view assessing value as ‘more Art than Science’ and believe that no single valuation method can effectively determine the value of every security. This is because different companies / sectors within the market can have vastly different earnings and free cash-flow profiles. Some of the more common techniques we use to assess value include:

  • Cyclical Industrials:     Mid-cycle EV/EBIT, EV/Tangibles Assets
  • Defensive Industrials:   EV/EBIT, PE, Gross Dividend Yield
  • Growth Industrials:       DCF, PE Relative, EV/EBIT
  • Financial companies:   Price/Book, Price/NTA, PE, Gross Yield
  • Resource companies:  DCF, EV/EBITDA

We will take into account ESG issues in selecting the multiples and discount rates we use to assess value.