Investment Philosophy
Intelligence, Values, Results.
Sage manages client and proprietary accounts utilizing a concentrated portfolio whose investment objective is risk-adjusted, above-average capital appreciation, within the boundaries of prudent capital preservation. In selecting investments, we have a value oriented philosophy based on a detailed assessment of fundamental enterprise value in the private market. This approach to valuation can be defined as the price at which informed corporate or industrialist investors would pay in order to acquire businesses or assets with a comparable competitive position and growth potential.
In recent times, the global economy is undergoing the greatest technological change in history. The digital revolution - and its underlying technologies - that is transforming many businesses has upended the conventional and time-tested benchmarks of value investing. This means that the concept of value versus growth stocks have both converged and diverged in sometimes unpredictable and disruptive ways. As everything becomes more digitized, there will be a continued acceleration into companies that have a strategic and technologically competitive advantage. The legacy of the digital revolution will be a widespread acceptance of technology, not just in e-commerce but in many aspects of the workplace and personal lifestyles. Digital disruption will be a recurring phenomenon for years to come.
We bring an unconventional perspective to investment management by applying a wealth of insider’s knowledge and industry contacts to the task of identifying undervalued and timely investment situations. Unlike most managers who come from portfolio management, institutional research, sales or trading backgrounds, our investment orientation comes from the initiation and implementation of strategic and financial transactions for corporate clients and entrepreneurs.
Our valuation process focuses upon an enterprise’s free cash flow less required capital expenditures. We strongly weigh revenue and earning trends as well as on and off-balance sheet assets and liabilities. We recognize that securities trade based upon a large number of quantitative and qualitative factors; hence we operate in a marketplace wherein many stocks (and their derivatives) in the course of a given year have a trading range between their highs and lows approximating fifty percent or more.
Our investment approach allows our clients to benefit from strategies that seek to capitalize on volatility and market inefficiencies. Once we identify investments that fit our valuation and timeliness criteria – it is cheap on a fundamental and technical basis – we take positions and monitor them closely. We seek to position ourselves in advance of long-term earnings trends or sustainable industry developments before those trends are fully recognized as Wall Street conventional wisdom. Once our positions are taken, we assimilate everything that can affect the market value of our ownership stakes. We also strive to be as tax-efficient as possible. We aim to be excellent stock pickers and market strategists, always keeping the larger investment picture in view.
In short, we try to know everything about a few important areas (e.g an industry, an asset category, a geographic sector, a security type) and something about everything else. We remain steadfastly agnostic about the prevailing Wall Street dogma, and leave open any doors of opportunity to capture the full abundance of opportunities in the global marketplace. Market volatility and a rapidly changing investment landscape require that we continuously keep our fingers close to the pulse of the major trading markets. The convergence of the various global financial markets calls for an investment manager with global insight, talent and accelerated response times. The achievement of absolute, sustainable, long-term returns is our goal.