The Responsible Way to Create Value
We rely on a disciplined approach and a long-term view to generate superior returns and reduce risk. This is how we align our approach with the interests of investors and those of a sustainable economy that benefits society and the environment.
Our investment culture is based on strong convictions
Being active managers
We are active investors, the opposite of index-based management. Companies that are part of an index tend to be overvalued since they are over-owned by about every institutional investor, mutual fund and exchange traded fund.
We must look outside the index to beat the market.
Investing for the long term
We believe the best portfolio managers act like business owners and take a long-term view. Building real wealth requires discipline and patience.
Risky bets, hot stocks, quick profits and speculation have no place in responsible asset management.
Staying focused on intrinsic value
Nothing distracts us from the essential: the potential of investments, which is usually hidden in the fundamental value of companies.
That’s why we don’t fear volatility, as it often comes from technical factors (asset flows), behavioral factors (fear or greed) or algorithms. And also because it creates excellent opportunities.
Investing in a sustainable way
Sustainable investment is not a short-term trend; it is a paradigm based on rational principles that extend well beyond ethical values. Environmental, social and governance (ESG) criteria influence the risk-return profile of issuers.
Those that properly integrate them into their business practices are more resilient and better positioned to deliver long-term outperformance.
- We focus on securities that trade below their fair value, are not well known or have a business model that is misunderstood by investors.
- We look for companies that have experienced a market decline and are therefore trading at attractive levels.
- We avoid overvalued or overplayed stocks.
- We have a bias toward small and mid-cap stocks, which typically trade at a discount due to lower liquidity or lack of analyst coverage.
- We prefer value stocks since they outperform growth stocks in the long run.
A process capitalizing on
street smart business judgement, financial analysis and experience
We find investment opportunities based on three main criteria:
Value
We are bargain hunters. As we look to invest in undervalued companies, we favour stocks that are trading at low multiples and are temporarily out of favour. Our process leads to a clear understanding of the business model and industry, which avoids falling into value traps.
Growth at a reasonable price (GARP)
While we generally have to pay-up for growth, there are limits that we are willing to pay. We want to buy as much growth as possible for as little as possible. These opportunities need to be captured quickly before analysts and the masses drive up valuations to unreasonable levels. We are able to seize them by using our proven financial analysis methodology to seek companies that have reasonable multiples relative to their growth rates.
Special situations
We are always on the lookout for events that could increase shareholder value. Dividend increases, share buy-backs, spin-offs, mergers or acquisitions, sales and consolidations... Our deep market experience makes us well-suited to seize opportunities that are missed by many analysts and investors.
Our analysis grid covers 22 factors
Our Canadian equity strategy is offered
as an investment fund or as an individual portfolio.
Analysis of the company's past
- Management record and experience
- Growth patterns
- Profitability history
- Performance versus Expectations
- Execution of business plan
- Return on equity
Analysis of the company's current profile
- Ownership structure
- Management team
- Business strategy
- Competitive position
- Balance sheet
- Profit margins
- Free cash flow
- Relative value (multiples)
- Discount to intrinsic value
Analysis of the company's future
- Earning predictability
- Realism of forecasts
- Growth opportunities
- Private market value
- Catalyst/value maximizing Event
- Analyst coverage
- Institutional interest
Our Canadian equity strategy is available as a mutual fund or individual portfolio.
- We use a top-down macroeconomic approach to identify sectors, instrument types and maturities to favour.
- We complete this approach with bottom-up credit analysis based on fundamental assessment to identify the best issuers and the most attractive securities.
- We invest primarily in fixed income assets including government bonds, corporate bonds, convertible debentures, preferred shares and money market securities.
- We actively manage risk by ensuring appropriate diversification by industry, issuer, credit quality and instrument type, as well as staggered maturities.
- We maintain a duration shorter than the index to minimize interest rate risk.
A value
conscious process
Duration and maturity management
To build our portfolios, we leverage our expertise to analyze interest rate spreads and the yield curve. As fear dominates and spreads widen, we favour higher yielding securities that offer capital protection. When markets are complacent and spreads narrow, we favour higher quality corporate bonds because we are not compensated for taking risk.
Selection of securities in corporate bonds
We favour companies with improving balance sheets to benefit from potential credit rating improvements. We also have a bias toward securities in less cyclical sectors with long-term recurring cash flows (telecommunications, utilities, real estate, pipelines, etc.).
Selection of high yield bonds
We favour tangible assets with strong covenants and capital structure, which make it easier for them to weather difficult times. And we take the time to analyze and understand protection contracts to see what the risks are, especially in the energy and materials sectors.
A diversified portfolio and sound risk management
The portfolio is invested in a diversified range of fixed income assets including government and government-guaranteed debt, high-yield and corporate bonds, convertible debentures, preferred shares and money market instruments. We have also established investment constraints that govern the portfolio structure and allow us to mitigate risk. Our Canadian bond strategy is available in both individual portfolios and investment funds.
How to Invest