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How are stocks selected?

Date: 05 October 2020

When considering new stocks, we investigate the following points:

Attractive market

  • What does the macro environment look like?
  • How fast is the market growth?
  • Does it operate in an area of structural growth?
  • Is the growth sustainable, and for how long?
  • What is the competitive landscape?
  • What is the company’s market share and are they winning market share?

Business Model

  • What is the business’s USP?
  • Do they have pricing power?
  • What are the barriers to entry?
  • How strong are the management team?

Strong Financials

  • Revenue growth
  • Quality of the earnings
  • Opportunities for margin growth
  • Strength of the balance sheet and cash flows
  • We forecast the group’s financials and see how they compare to consensus numbers

ESG (Environmental, Social & Governance)

  • ESG is fully integrated into the research process, which helps us identify risks and opportunities

Valuation

  • We use different valuation metrics based on their sector to determine what we think the valuation should be.

M&A

  • Most of the companies in our portfolio are market leaders in their space, with strong balance sheets to pursue M&A to consolidate the market.

Watch time: 3 minutes

AIM Strategy

We understand how important it is for clients to plan and preserve for the next generation and their loved ones. The Quilter Cheviot AIM strategy is designed for estate and inheritance tax (IHT) planning at an accessible entry point of £100,000.

AIM Strategy