We believe that an equity portfolio should be constructed from a selection of durable, high-quality businesses.
Enhancing Capital invests with a business owner's mindset when buying shares in a company. Our concentrated, long-only equity strategy invests in quality, durable businesses that we hope to hold for the long-term. We want to invest in businesses with strong competitive advantages, forgiving capital structures, and diligent management teams that trade below our reasonable estimate of future value. Our commitment to a rigorous research process and unwavering focus on business fundamentals are the foundation of our equity strategy.
We believe that the key to superior performance over time is owning higher-quality assets and paying a fair price for them. This philosophy reflects our commitment to fundamental, value-based investment research.
We want our clients to know WHAT they own
and WHY they own it.
We want our clients to know WHAT they own and WHY they own it.
As analysts, we place a high value on thoroughly understanding our investments.
The goal of our research process is to evaluate a company's competitive advantage, market position, leadership team, and financial profile. We aim to invest in strong companies that trade at a discount to our reasonable measures of fair value.
We believe that performing diligent analysis before investing client dollars and continually monitoring positions after investing offers the most sustainable path to long-term value creation.
We want our clients to know what they own and why they own it.
Our broad mandate allows us to look across industries, geographies, and market capitalizations to find the most compelling opportunities in the market.
We acknowledge that developed markets are reasonably efficient, yet individual stocks are often driven by short-term narratives and sentiment.
Fundamental investing takes a long-term view and allows investors to profit from divergences in share price and intrinsic value.
Stock prices are volatile. Business values, we believe, are less so.
We believe investors should have the mindset of a business owner. While there are thousands of available opportunities, the beauty of the stock market is that investors have the freedom to pick only the best.
We choose to invest in companies that we would be proud to operate if we had 100% ownership of the business.
These businesses should demonstrate sustainable, high returns on capital due to their competitive moat, market position, and business strategy.
We believe that an equity portfolio should be constructed from a selection of durable, high-quality businesses.
We offer a simple, open, and competitive fee structure.
We seek to partner with clients that understand and respect a long-term investment approach. We believe value alignment and client education are key to success.
We invest alongside our clients, frequently aligning our own capital with the positions we manage on their behalf.
While focused research drives our investment decisions, our clients will always remain our top priority.
Fundamental equity investing ultimately boils down to value and probability.
Attractive return opportunities exist across an array of sectors, market capitalizations, countries, and markets.
As generalist investors, we fish across multiple ponds, working to locate the best risk/reward opportunities for our clients.
A new investment must be attractive relative to the benchmark, our investable universe, and the current portfolio. If a prospective investment is less financially attractive relative to the current portfolio, we require high conviction on the margin of error, probability, or magnitude of forward returns.
Maintaining a high bar for both investment and divestment is key to our long-term goals. Overreacting in the near-term is one of investing's most common errors.
We aim to hold a portfolio of 20 to 40 stocks with low turnover.
Our investable universe consists of over 2,000 companies. We do not adhere to a strict investment mandate - we may expand or contract our target universe as opportunities arise.
Our attention is centered on being broadly accurate rather than falsely precise; fundamental equity investing ultimately boils down to value and probability.
Stock prices can deviate from intrinsic value due to short-term overreactions or the market’s inability to accurately value a sustainably growing business. We seek to capitalize on these opportunities to buy great businesses at great prices.
Cyclicality is an important factor when quantitatively analyzing a business. However, we don't avoid investing in cyclical businesses outright, but rather seek to own the "best-of-breed" in a specific market segment.
Durable businesses have a competitive moat, advantaged cost structure, or unique market position that allows for growth through the economic cycle, not despite it.
Our long-term investment strategy seeks to minimize our clients' tax burden by limiting short-term realized capital gains outside of exceptional circumstances.
While we avoid frequent trading, we actively monitor opportunities to tax-loss harvest for our clients' taxable accounts, ensuring we capitalize on opportunities to offset taxes on realized gains.
Enhancing Capital was founded as a family office in 2007 to manage investments for a family of businesses. Enhancing Capital became a registered investment advisor (RIA) in 2017, today managing over $300 million in firmwide assets.
The information provided herein is for informational purposes, represents only a summary of topics discussed, and does not represent personalized investment advice or recommendations. The opinions expressed herein are those of Enhancing Capital, LLC, which are subject to change without notice.