Investment Process

Canadian equity portfolios are managed using a disciplined four-stage, bottom-up process based on thorough fundamental analysis.

• First, we conduct a value screen on all S&P/TSX companies on the basis of traditional valuation measures, such as price-to-book and price-to-earnings ratios.

• The second stage focuses on understanding the company and why its valuation is being discounted in the marketplace. Our analysis at this stage takes a close look at historical earnings, operating risk, the track record of management and the competitive advantage the firm has within its industry.

• In our third stage, we look at the operating environment and changes that may have taken place that would inhibit the company's ability to repeat its past successes.

• At the final stage of our process, we estimate a fair value per share. We stick to a basic set of tools to obtain our valuation estimate of a particular company. We analyze a firm in terms of discounted cash flow, breakup value, net asset value, relative cash flow and earnings multiples.