- Investment selection for our Equity Portfolios is based on our own rigorous, independent, bottom-up, company research.
- It consists of approximately 20 different stocks, representing companies of all sizes located primarily within North America.
- Where possible, we seek to establish close relationships with the management of the businesses in which we invest, to assist us in monitoring their operating results and evaluating their future prospects.
- We invest in public companies when we believe their shares are deeply undervalued and trading at levels significantly below their intrinsic worth (based on fundamental earnings and cash-flow based metrics).
Bridgeport favours taking ownership stakes in public companies that:
- Generate high levels of operating cash flow relative to their market valuation.
- Generate significant recurring revenue (i.e. repeat customer business).
- Exhibit high barriers to entry through:
- Dominant market positions
- Branded products/services
- Long term customer contracts
- Significant economies of scale
- Achieve consistently high profit margins and rates of return on capital employed in their business.
- Are conservatively capitalised.
- Employ skilled and experienced management who are effective allocators of capital.
- Are not susceptible to rapid technological change.
Our valuation methodology focuses on the value of a public company in its entirety using earnings and fundamental valuation metrics such as:
- Enterprise Value / EBIT
- Enterprise Value / EBITDA
- Enterprise Value / Free Cash Flow
- Price / Earnings
- Price / Adjusted Book Value