Atlanta Capital High Quality Focused Growth
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We seek to invest in companies with a demonstrated history of consistent growth and stability in earnings in an effort to outperform over the long term by participating in rising markets and minimizing participation in declining markets. The strategy is managed with a fundamental, bottom up process, seeking to identify high quality growth businesses with dominant franchises that provide competitive advantages, priced below our estimate of intrinsic value.
Long-term definition of quality |
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Our approach identifies quality based upon the historical consistency and stability of earnings growth over the past ten years and not just a point in time. This long-term lens results in a stable universe we know very well. We believe our search for consistent compounding companies will reduce volatility and risk. |
Consistent Earnings Growth |
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We seek companies that provide long-term growth opportunities. This growth is typically supported by secular tailwinds, long product life cycles, and increasing market share. These business models typically maintain dominant franchises with enduring competitive advantages, high barriers to entry and pricing power. We have a bias towards business models that generate predictable and recurring revenues and strong, sustainable free cash flows. |
Long-term Investors |
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As patient investors, we use time to our advantage, with the goal of building wealth over time. This enables us to buy good businesses at reasonable valuations and allows our investment thesis to develop. |
Minimize Downside Participation |
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The objective of the high quality philosophy is to participate in rising markets and preserve capital in declining markets. By avoiding a volatile pattern, especially in down markets, the power of compounding becomes even stronger and provides greater long-term wealth. |
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Focus on companies with dominant franchises, consistent growth, and stability in earnings. |
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Conduct fundamental analysis to determine the long-term competitive advantages and secular tailwinds for sustainable earnings growth. |
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Construct diversified portfolios of companies with a multi-year investment horizon, purchased when they are priced attractively relative to our estimate of intrinsic value. |
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Sell a company if a more compelling opportunity materializes, a change in investment thesis or deteriorating fundamentals, or valuation becomes excessive. |
