Value Approach / Selection
We search for companies with an attractive quality ratio and valuation. Qualitativley strong companies are established companies with a strong balance sheets, resilient cash flows and a crisis-proof profitability. A good indication of this is the return on capital employed (ROCE).
|ROCE:||The return on capital employed is a suitable benchmark for the attractiveness of the market and the sturdiness of the company. A high ROCE means that the fixed costs are low and the capital needed for organic growth is also very small.|
|EV/EBIT:||The ratio of enterprise value to operating profit is a calcuation ratio which considers the situation of debt and is oriented on the cash flow.|
Throughout the portfolio construction process, we pay attention to a good diversification in resources, companies, geographies, company sizes and business models. In each subject area we have a ranking of attractiveness of the company by quality and valuation.