1) Company Research
The main emphasis of our company research lies on qualitative analysis. We want to identify companies that have the ability to generate free cash flow or surplus capital on an on-going basis, because they:
- enjoy an above-average market position on the basis of lasting competitive advantages
- have a management that is committed to long-term corporate success
- benefit from global megatrends
Furthermore we assess the valuation of stocks and bonds issued by a company to find out whether and how strongly the future prospects and risks are already reflected in the price.
For this purpose we determine the valuation ratios for the stocks or bonds of a company, and compare them with reference figures that have been significant in the past.
2) Economic Research
Our economic analysis is aimed at the identification of long-term development trends in single national economies as well as the global economy. In particular we examine:
- Specific country risks to determine the default risk of state debtors and assess the regional activities of companies.
- The identification of global megatrends and their effects on nations and companies.
3) Investment Funds
To assess investment funds and certificates, we place special emphasis on these topics:
- Investment objectives: Are the investment objectives exactly defined and strictly implemented?
- Expenses: How high are the visible and hidden costs? How fair are the performance fees?
- Risks: Are there specific risks (e.g. the issuer's risk with investment certificates)?
- Consistency of fund management: Is the management team stable and experienced? How is the investment process structured?
Our investment assessments are for the long term
In our analyses we assess securities and their suitability as investments. However, our analyses differ from the usual practice of financial analysts in three ways:
- Our investment views are given on a time horizon of 5-10 years, so specifically for long-term investors.
- Our methodology is aimed at the identification of investments whose appreciation is based on the creation of real values for a longer period. However, in successful companies the economic value increases constantly, while failing enterprises face a persistent erosion of their value. Therefore, precise price targets on the basis of fair value calculations make no sense for long-term investors, because these would have to be revised constantly over time. Hence, logically we do not name concrete price targets.
- Our investment assessments are specified according to the risk orientation of different groups of investors.