The progressive value approach
Why we buy. We seek conservative investments with a low book value or net asset value and a marked potential to grow; that are producing dividends or other forms of income; and that have good Earnings Per Share coverage, zero or manageable debt loads, a consistent Return on Equity and Return on Investment, strong leadership, innovation, and steady cash flow. We constantly conduct detailed fundamental analysis to identify strong balance sheets, good valuations and defensive characteristics from amongst the most promising firms. We win by limiting losses to your capital. The big money is made sitting and not trading until market conditions warrant a change.
Why we sell. We buy and hold, but do not remain passive if the context changes. As active managers, we hold a stock as long as it behaves as we predict it should, but sell as market conditions change. Our analysis identifies securities, markets or sectors that are vulnerable, declining or free-falling; as our disciplined stop loss points become activated, we sell to limit the loss of capital.
Performance. Our Progressive Value Canadian Equity Mandate has exhibited strong and steady appreciation for the past six years. Since 2000, with one exception (2008), it has consistently outperformed the TSX.
Over the past year, this yielded 9.9% (9.1% over the past 10 years) and the Stuchberry Balanced Mandate yielded 10.4% (8.8% over the past 10 years), while the S&P/TSX Total Return Composite yielded 7.2% (9.1% over the past 10 years).* Our top-down (macroeconomic) and bottom-up (market timing) analysis, along with fundamental (company) and technical (broad market and sector) analysis, contribute to wise investing decisions for optimum returns.
Secrets of our success:
1. We buy stocks only when markets, sectors and valuations are suitable.
2. We always strive to own the strongest companies in sectors with the best valuations.
3. We time purchases to maximize price performance and minimize market exposure.
4. We manage risk to reduce loss.
5. We maintain cash positions when our buying criteria are not met.
6. We like receiving income wherever possible — to earn while we wait.
7. The BIG money is made by sitting and not trading.
8. Securities reaching new highs tend to continue climbing — let the winners soar!
9. Stocks with stagnant share prices represent lost opportunities. They are a signal to find better value or write call options.
*Source: Stuchberry Wealth Management Group and Bloomberg.
Performance is model based and net of all fees. Individual account performance results and account composition may differ from that of the listed model portfolio due to client imposed restrictions, timing of trade executions, deposits, withdrawals and market fluctuations. Past performance is not necessarily indicative of future results.