Disclosure: long SOFO.
© 2009 Jeffrey Walkenhorst
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Owner-Oriented Investment Research and Commentary - Have a private comment or question? Email us at email@example.com
Common Stock $ense was created by Jeffrey Walkenhorst to periodically share investment ideas and views, and contribute to the community of investors dedicated to fundamental analysis and active portfolio management. Copyright 2009, 2010, 2011. All rights reserved.
Investment strategies and styles abound today, many of which are focused on short-term, trend trading without regard to the underlying business or its value. At CommonStock$ense, we believe investing in Common Stocks as a business owner not only makes Common Sense, but can significantly compound Cents into Dollars over time. Rather than viewing stocks merely as pieces of paper for trading, our approach is to invest as owners of (1) high quality, (2) franchise businessescapable of generating (3) high returns on equity and (4) large, predictable free cash flow through economic cycles with (5) limited capital requirements and (6) capable management teams. We strive to establish equity positions in such businesses at a (7) substantial discount to our estimate of fair value by taking advantage of changes in investor sentiment and market volatility, and/or temporary corporate setbacks. Finally, we generally seek companies with (8) limited to no debt.
Two caveats: every now and then, we may invest in (1) off-the-run, smaller franchise companies that we believe have sustainable competitive advantages and are trading significantly below the valuation an informed private market buyer would be willing pay for the entire business; and, (2) companies that have valuable, differentiated physical assets where we see a meaningful margin of safety relative to normalized asset values.
Our own experience at CommonStock$ense suggests that an owner-oriented investment approach leads to preservation of capitaland favorable long-term returns, as well as sound sleep at night. For helpful reference links, please also see CS$ companion site, The Discriminant Investor.
* The content contained in this blog represents only the personal opinions of Mr. Walkenhorst based on his own research and analysis.
* All data, information, and opinions expressed, are subject to change without notice.
* Mr. Walkenhorst may hold either long or short positions in securities of various companies discussed in the blog.
* Under no circumstances is this message an offer to sell or a solicitation to buy securities suggested herein.
* Invest at your own risk – all equity investments are subject to risk and an investor can lose some or all of his/her money.
* Any investment decisions you make should be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance, and liquidity needs.