Bottom-up. Research-driven. Built on conviction in great companies, not indices.
Quality
Sustainable Competitive Advantages Create Exceptional Businesses
Growth
Predictable Revenue & Cost Structures Drive High-Quality Earnings Growth
Valuation
Valuation Discipline Designed to Enhance Returns & Mitigate Risk
Our Investment Process
Our portfolio management and research team combines intensive fundamental research with a rigorous valuation methodology that we believe helps to reduce risk and enhance long-term returns.
Screening
The investment team, structured as generalists with sector expertise, screens for high-quality companies with durable business models, sustainable competitive advantages, and high barriers to entry. We seek businesses with predictable revenue and earnings growth, strong balance sheets, consistent free cash flow generation, and high returns on equity and assets—hallmarks of quality and resilience that support long-term compounding.
Fundamental Research
We perform extensive fundamental analysis on each potential investment, evaluating competitive positioning, balance sheet strength, management execution, and industry structure. Our proprietary research process integrates both quantitative and qualitative insights to help forecast sustainable growth, profitability, and valuation targets. This disciplined approach underpins every investment decision and ensures that conviction is grounded in data, not narrative.
Earnings Models
We build proprietary three-year EPS models for every company we own or consider, with both “most likely” and “low” scenarios that are designed to test the durability of a business through different economic and competitive environments. This scenario-based approach helps us to understand the sensitivity of valuation to changes in growth, margins, and capital efficiency—key to assessing risk-adjusted return potential.
Valuation
We establish a target forward four-quarter P/E ratio based on our assessment of a company’s sustainable earnings growth, competitive position, and balance sheet strength. By purchasing securities at a discount to this target valuation, we seek to capture upside potential while reducing stock-specific risk. We believe this valuation discipline is unique among growth-stock managers.
Buy/Sell Discipline
We buy a stock when business fundamentals are strong and the valuation is attractive on the next four quarters of earnings. DSM trims or sells a holding generally when the stock’s expected return falls well below the rest of the portfolio, often after its price has run ahead of earnings. We may also exit a position following repeated earnings disappointments or when a stronger investment opportunity arises. Our disciplined valuation process helps us sell, sometimes even winners, when future returns look less compelling, with the flexibility to revisit them when valuations improve.
Our Approach
High Conviction Portfolios
Focused Portfolios for Long-Term Outperformance
We believe in concentrated portfolios of growth companies with predictable revenue and earnings growth, priced for long-term success.
Disciplined Process
Rigorous Research Meets Sound Valuation
Our bottom-up approach combines intensive fundamental research with a valuation methodology designed to reduce risk and enhance returns.
Predictable-Quality Investments
Investing in Predictable, High-Quality Businesses
We target companies with stable or rising financial returns, driven by strong fundamentals, intelligent management, and at least 10% projected growth annually.
Flexible and Opportunistic
Adapting to a Rapidly Changing Landscape
Our flexible research process adjusts to meet the challenges of dynamic markets, continuously monitoring investments to mitigate risks and seize opportunities.