In an early edition of Security Analysis by Graham and Dodd, the authors stated that nearly every stock could conceivably be a good investment at the right price. The foundation of our investment approach is built on several of the principles formulated by Graham and Dodd; however, price is not our only investment consideration. We often find and purchase businesses with more vibrant qualities. Our selection criteria include the following:
- Businesses we understand that possess sound capital structures and maintain conservative accounting policies.
- A current market price that is 35–50% below our estimate of intrinsic value.
- A business model that provides strong potential for per share intrinsic value growth.
- Management teams led by strong operators and proven capital allocators who have clearly aligned incentives in place to maximize shareholder value.