Diving Deeper into What Makes a Company a Decent Investment….

Check out this recent educational video featuring, Chief Economist, Steve Taddie and the Chairman of our Individual Securities Subcommittee, Kittywatt Sripom who dive deeper into how seemingly good companies might not always be good investments and vice versa.

Analyzing factors that can affect the real, current, and future value of a company such as:

• State of the industry: for example, is the company, while still enjoying brand recognition and high market share, in decline due to things like technological advancements that have surpassed them? (Think Kodak & the photographic capabilities of the smartphone).
• Rising input costs: Is the company facing rising input costs such as increased labor needs or raw goods that have been heavily affected by inflation?
• Inaccurate/underestimated market expectations: Sometimes the market does not price in improvements on the horizon resulting in companies that are undervalued.
• Investment in the future & the ability to navigate economic storms/slowdowns: Often companies are investing in the future which affects their short-term profitability. Investments take time and looking at future growth and the ability of a company to pay off its debts can be key (think AI and the costs it takes to build out data centers).

Ultimately our Investment Committee(s) and the teams we partner with, look for and characterize companies that can often make good investments by looking at their management teams, where they are in relation to their peers/competition in their industries, what type of market share they hold (or are expected to hold), if they have a competitive advantage with respect to barriers for competition, and of course if they have a strong and healthy balance sheet with steadily growing revenues and earnings.

For more information check out the full video by clicking below, or reach out to us!

Disclaimer(s): The information in this video is educational and general in nature and is not intended to be, nor should it be construed as, specific investment, tax, or legal advice. Individuals should seek advice from their wealth advisor or other tax advisors before undertaking actions in response to the matters discussed.

Investments involve risks. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment.  All investments include risk of loss that clients should be prepared to bear.

On 09/01/24, HoyleCohen, LLC (“HoyleCohen”) merged with and into The Colony Group (“Colony”). Clients of HoyleCohen assigned their advisory agreements to Colony.