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Investment Philosophy

Using fundamental analysis we spend our days searching for companies that offer value based on long-term earnings growth, cash flow prospects and deployment of capital to create shareholder value. We are not value-investors in the traditional sense of the phrase; but believe in reasonable pricing for top-quality assets with a higher-than-average growth outlook.

 
Investment Process

We focus on individual businesses and the people that run them. We follow a disciplined, fundamental, bottom up research process. Our fundamental analysis starts with the basic entry point of ‘doing the numbers’ and getting to understand the price drivers of each of the companies. Meeting with management is crucial for understanding the companies’ growth prospects and its ability to manoeuvre within its sector and the current economic environment. We are cognisant that our investments in listed equities and bonds is within a global framework influenced by the political and economic environment. We do not forecast macro drivers, but remain vigilant of market consensus and aware of their impact on the companies’ share price and bond yields.

Valuations and ratings are the basic premise for our calculation of intrinsic value. This intrinsic value is used to determine the relative value of the share price. We look for strong cash flow generation, whether the company has pricing power (or if it is a price-taker), for disciplined capital management and “franchise quality” brands.

Understanding the products our clients invest in is key to their success. On their behalf, we carefully analyse the risk-reward plane when designing products and work closely with our clients to offer tailor-made solutions, finding the appropriate investment metrics and parameters to meet investment goals.
  Cartesian Capital (PTY) Ltd is an Authorised Financial Services Provider - FSB number: 45318