Change
Turnaround Opportunities
We establish positions in companies on the cusp of a fundamental turnaround. Typical drivers of a turnaround are a cyclical upturn in an industry, a new product cycle or a company restructuring (often with new leadership).
Cheap
The stock of the company under consideration must be significantly undervalued relative to our estimate of its intrinsic value. A typical new position will possess appreciation potential of 50-100% at the time of purchase. We expect our price targets to be realized within three years.
Competitively Stable
We require the companies we purchase to have stable or growing shares of predictable and essential markets. If it is unclear whether or not the company meets that criteria, we consider the investment speculative and outside our discipline.
Conservatively Financed
We will never own a company that we believe will need to refinance its debt. Typically, half of the companies in our portfolio have net cash on their balance sheet.