At JC Clark Ltd. we have developed an investment process that allows consistent application of our core investment principles. We believe that a disciplined adherence to these principles is one of the key elements to generating and sustaining superior long-term investment returns. The primary steps in our research process are as follows:
Utilize industry databases, proprietary industry and company knowledge, contact networks, and various investment services to generate a target list of potential investment opportunities
Industry & Business Analysis
Identify and understand key industry dynamics, competitive environment, barriers to entry, pricing stability, growth opportunities and technological threats
Historical financial analysis, future projections, liquidity and solvency analysis, discounted cash flow analysis, multi-dimensional calculation of intrinsic value
Assessment of Management Team
Establish an ongoing communication link with senior management by way of regular conference calls and onsite visits with senior officers of the company
Assess near-term risks or catalysts, allocate capital to investment opportunities
With this process we expect to identify businesses that possess many of the characteristics of our â€śideal investmentâ€ť: strong and growing free cash flow, a solid balance sheet, high barriers to entry, pricing power, a growing market for products/services, and a strong management team. We also seek to identify businesses that are in secular decline, have eroding margins, are susceptible to increasing competition or pricing pressure and possess high levels of financial leverage. These poor quality businesses often present excellent hedging opportunities within our long/short strategies.
While each investment opportunity has its own unique merits, our core investment principles and consistent process has allowed our Funds to generate outstanding long-term returns.