Portfolio Manager Spotlight: Six Investing Truths

Here are a few thoughts on the topic from one of Eventide’s portfolio managers, Andrew Singer. These six truths guide his investing style and are integral to our thinking at Eventide. Mr. Singer serves as Portfolio Manager for Eventide’s Large Cap Core Strategy and Co-Portfolio Manager for the Dividend Growth Strategy, as well as Senior Research Analyst on other Eventide investments.

• “Know Thyself.” As investors we need to stay inside our circle of competence. We are aware of the investing style that works for us. We focus on what we believe to be high-quality companies that trade at a discount to their intrinsic, long-term value.¹ Our goal is to be in the top 1% of knowledge on the companies we analyze.

• High-quality focus. These companies have wide moats (e.g., proprietary technology, brand); great management teams; operate in attractive industries; and create value for all stakeholders and society. We believe these companies can sustain their market leadership over the long run. But the portfolio we create is not stagnant; rather, we remain vigilant and continually perform in-depth research. The high-quality companies of today may not remain so. We seek companies that continue to innovate and expand their moats.

• Management teams at the core. We seek management teams that focus on creating long-term value, even if it comes at the expense of short-term profits. They set the proper strategic vision and are strong at operational execution; they are mission-driven; and they create great cultures in which employees can thrive. Through it all, they lead with integrity.

• Rigorous valuation. High-quality companies often create more value than the market expects. Short-term measures such as forward 12-month P/E are often too simplistic. Instead, we use a long-term discounted cash flow analysis which factors in our estimate of a company’s competitive advantage over time, as well as its risks.

• Take the long view. After buying a security, we continue to follow it closely, making sure our investment thesis is intact. We adopt a long-term view and stay patient. The short term can be rife with noise and volatility, so there may be a lag between when we buy a stock and when that stock generates strong returns.

• Stay Humble. This is perhaps the most underrated aspect of investing. We keep an open mind. If the facts change or our hypothesis turns out to be wrong, we respond.

At Eventide, we believe that building a portfolio with the above guidelines gives us the best probability for success.