Clear Capital’s research philosophy is simple: to produce fundamental, independent ideas. · Fundamental: Our focus is on competitive advantage, informed by primary data · Independent: Independence of mind means we are challenging and questioning in our approach · Ideas: High conviction, no "Holds" Fundamental
We avoid the obsession with quarterly earnings and the short-term noise in the market, and don’t do "maintenance research". Instead our research asks fundamental questions about corporate business models; competitive advantage; and the evolution of markets and position of competitors within them. These are the factors that determine the profitability of companies over the longer-term.
A particular focus is on the sources and sustainability of competitive advantage, drawing on the work of our Chairman John Kay, in publications such as "Foundations of Corporate Success". See www.johnkay.com. John Kay is one of Britain’s leading economists.
We apply a number of frameworks to understand competitive advantage, but also crucially we inform this view using primary data - customers, suppliers, competitors - and avoid reliance on management comment. Finally, valuation is driven by a disciplined, consistent cash flow approach, often CFROI (Cash Flow Return on Investment), as it allows us to understand the life cycle of the firm and explicitly link competitive advantage to valuation.
Independent
Independence for us is more than just a label. It means we tell it as we see it, continually questioning the consensus and market view, and that our interests are closely aligned with our clients. Our sole aim is to apply our knowledge and expertise to help clients make better investment decisions.
Ideas
We focus on providing clients with high conviction, actionable ideas; Positive or Negative, no "Holds". We also maintain an even balance between Positives & Negatives, with none of the normal bias towards "Buys" through the cycle.
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