Our Path to Disciplined Value Investing
Value investing is more than just buying cheap; it's about finding quality companies whose intrinsic value the market misunderstands. The fact that Telenor…
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How we invest
Our investment process
We follow a clear and disciplined process to find quality companies at the right price. The process is designed to minimise mistakes and maximise long-term value creation.
Our philosophy
Mispricing, quality and discipline
Our philosophy rests on three pillars. We clearly distinguish between a company and its stock. A fantastic company does not become a good investment if the price is too high, and a mediocre company does not become good just because it looks cheap on the surface. We want to own companies that can deliver sustainable profitability over time, but only when the price gives us sufficient margin of safety.
- Focus on mispricing
- We do not just buy quality. We want to buy quality at the right price.
- Margin of safety
- We invest only when the price provides a clear buffer against our assessed fair value.
01
Step 1
Idea generation and screening
The process begins with a broad screening of the Nordic stock market. We look for companies with proven profitability, strong cash flows and sound balance sheets. The result is a shortlist of companies that meet our basic quality criteria and then go on to in-depth analysis.
- Quantitative screening
- Systematic review of Nordic companies based on financial key metrics.
- Quality filter
- Focus on profitability, cash flow and balance sheet strength.
02
Step 2
Analysis and valuation
In the second phase we conduct in-depth fundamental analysis of each company. We evaluate the sustainability of the business model, competitive advantages, management quality and capital allocation. Most important is the historical development in revenue and earnings per share and assessing whether margins can be considered normalised. We only buy at a price that provides sufficient margin of safety.
- Fundamental analysis
- Business model, competitive advantages, management and capital allocation.
- Margin of safety
- We buy below our estimate of fair value to create a buffer.
03
Step 3
Portfolio construction and risk management
The final portfolio is concentrated to our best ideas. Each position reflects our conviction level, how much upside we see and how the holding affects the portfolio's overall risk. We spread the risk across sectors and avoid becoming too dependent on a single theme. The portfolio is adjusted when conditions change, not because the market moves.
- Stock by stock
- ~25 to 40 holdings where each company has an assessed fair value and is bought with a margin of safety.
- Active risk management
- Continuous monitoring and adjustment of the portfolio's risk profile.
04
Step 4
Monitoring and divestment
We monitor each holding continuously. We sell when the stock reaches fair value, when the fundamental picture deteriorates or when a better case is identified. We do not sit still out of laziness, but we do not change just because the market swings.
- Disciplined divestment
- We sell when the price reaches or exceeds our assessed fair value.
- Ongoing reassessment
- Each holding is continuously re-evaluated against alternative investment opportunities.
We do not marry our view of the company. If conditions change, we update fair value.
Fair value is an estimate, not a truth. When the conditions change we update our view.
The foundation of our philosophy
Our philosophy rests on three pillars: mispricing, quality and discipline. We clearly distinguish between a company and its stock. A fantastic company does not become a good investment if the price is too high, and a mediocre company does not become good just because it looks cheap on the surface.
The starting point is that we want to own companies that can deliver sustainable profitability over time, but only when the price meets our required margin of safety. We do not chase what is performing best right now, but look for situations where the market's short-termism has created a discount in quality companies.
From universe to portfolio
We start from a broad Nordic universe of listed companies and focus on those we judge to have sustainable quality. We monitor these continuously, with focus on track record, profitability, balance sheet, capital allocation and how the companies have acted in tougher periods.
For each company we set a fair value based on our view of normalised cash flows, margins, growth and risk. Only when the stock trades at a clear margin of safety does it become a candidate for the portfolio.
Discipline over time
The portfolio is concentrated but not narrow. We want few enough holdings for each position to matter, but enough to spread the risk. We sell when companies reach or exceed our assessed fair value. What happens after that is not our concern.
In periods when the market chases everything that rises, this may mean we lag the index for a while. That is a deliberate consequence of sticking to our strategy: we always want to buy quality with a margin of safety, not on the hope that someone else will be even more optimistic.
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