Under the spotlight
In the December 2016 edition of Insights, the value investment style is discussed and Perpetua Investment Managers is reviewed (by Tatjana Raunich, Qualitative Research Analyst, Momentum)
Value investment managers – nerves of steel, patience of Job and unwavering conviction
Value investment managers seek companies in the market that have been priced cheaply relative to their intrinsic value; where the fundamental value of a company has not been acknowledged in the market price, or a catalyst that will unlock value of the company in the future is identified. When the rest of the market realises the true value of the company, it will be reflected in the market price. Once the market price of the share increases to a price level the investment manager considers to reflect fair value of the company, the investment manager will sell the share and a profit will be realised. The value philosophy advocates buying good companies, at good (low) prices. After purchasing the share, time is needed for realisation of value; this time frame is usually longer than
anticipated, hence the need to think of value investing as a long-term strategy.
Read the full article here.