Investment Lifecycle and Strategies
WHERE WE DIFFER
OTHER INVESTMENT MANAGERS RELY ON MULTIPLE EXPANSION FOR
RETURNS (I.E. BETTING OTHER INVESTORS WILL PAY MORE FOR THE
SAME ASSET IN THE FUTURE).
•
Their time horizons are too short to benefit from fundamental changes in the company
itself, so they seek to benefit from changes in perception of a company's stock instead.
This is often pitched as “multiple re-rating,” “sentiment shifts,” “change in perception,” etc.
MEANWHILE, WE BELIEVE THE BEST WAY TO DETERMINE A
BUSINESS' LONG-TERM VALUE CREATION, IS EARNINGS GROWTH.
•
This is a function of Return on Invested Capital x Reinvestment Rate, and our research
process is largely focused on these two components.
Distressed/Deep-value /
Sum of Parts Investors
Hayden Capital /
"Compounders" /
Long-Term Investors
Event-Driven Funds / Market Neutral /
"Traders"
=
Stock Return [Dividend / Stock Buyback] + [Earnings Growth] + [Multiple Expansion / Contraction]|
Earnings Growth = Return on Invested Capital x Reinvestment Rate
HAYDEN CAPITAL 11View entire presentation