Alek Trpkoski | Portfolio Construction – Value Driven Strategy
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Portfolio Construction – Value Driven Strategy

When looking to construct a share portfolio strategy is key.There are many strategies to consider with one such strategy being a value driven global investment strategy.

This strategy focuses on mispriced investment opportunities that can be found by analysing company fundamentals and special situations such as spin-offs, placements, rights issues dividend payments and other corporate actions.

To select securities we seek to identify companies that are under or overvalued based on one or more, but not limited to, following characteristics:

  • Price to Free Cash Flow
  • Price to Earnings
  • Enterprise Value to EBIT
  • Enterprise Value to EBITDA
  • Price to Sales
  • Price to Book
  • Expected Earnings Growth/Decline
  • Price to Sales & Expected Revenue Growth/Decline
  • Special Situations such as spin offs, restructures, recapitalisations, mergers and turnarounds
  • In the process of doing one of the following; reducing costs, raising prices, expanding in new markets, selling more of its product in the old market, selling new products

The strategy aims to capture returns by trading both long (prices going up) and short (prices going down) in securities experiencing these corporate events.This strategy also allows you to invest in fundamentally under/overvalued securities based on quantitative and qualitative factors.

Understanding such strategies and working on them consistently, allows you to achieve your long term and overall aim.

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