UBP’s dedicated team of experienced global sector/country analysts aims to take advantage of investment opportunities that present themselves over the course of a company’s life cycle. The team conducts rigorous fundamental and quantitative analysis on a large number of firms, and their stock-picking has outperformed the MSCI AC World TR in almost every calendar year since 2005.
During a typical company’s life cycle (i.e. growth – maturity – decline), its business model generates varying levels of cash flow return on investment CFROI). While superior CFROIs tend to fade down to the Cost of Capital (CoC) as value creation opportunities attract competition, leading to margin compression, inferior returns may “fade up” to the CoC as a result of restructuring or competitors exiting the market. The team looks to recommend and invest either in companies with consistent, superior CFROIs and that steadily create value over the long term but that are not yet discounted by the market, or in turnaround stories that are drastically undervalued. The team also focuses on companies that are experiencing a phase of accelerating growth that may not yet be fully appreciated in terms of the magnitude and duration of the widening positive spread between CFROI and CoC.