We focus on companies that are building their earnings power and building the intrinsic value of the company over long periods of time. We invest in high-quality growth companies that demonstrate the ability to sustain strong secular earnings growth, regardless of overall economic conditions. Our investment strategy bridges human insight with data analysis to identify whether a company demonstrates the building blocks of our philosophy—and to anticipate whether those building blocks will endure for sustainable high returns on invested capital.
With personal relationships with hundreds of companies, we continually look for companies that stand out in their market. Whether through trade shows, conversation with industry leaders and competitors, or research into the products we see and use every day, we are always listening and searching for companies that meet our criteria.
When we have identified a company we think has potential, our next step is to examine the fundamentals. We take a careful look at the data—unit growth, market position, financials, and accounting practices. Then we get on a plane and meet the management face-to-face, listen to employees, peers, customers, and competitors, and experience the culture for ourselves. Only after thorough due diligence do we add a new company to the portfolio.
We don’t stop testing for endurance once a company has been added to our portfolio. We thoroughly review every company before we increase its position in the portfolio—and we continue to review its fundamental building blocks to ensure they remain sound over time.