The Pengana Emerging Companies Fund investment process is centred around a very active company visitation program in the belief that management is the most important factor in assessing investments in the sector. Over time we expect to visit most of the 800 or so companies in our universe.
Qualitative based analysis focuses on management, product/service quality, competitive advantage, growth prospects and financial position. Favoured stocks are then fully modelled providing the inputs for a standardised cashflow based valuation. We then cross check this valuation with other investment tools such as the Price Earnings ratio, the Enterprise Value/Earnings Before Interest Tax and Amortisation ratio and dividend yields.
As we will only invest in companies we can value with relative confidence, we will not own resource companies, listed property trusts, biotech stocks or loss making stocks.