Managers and analysts at Financière de l’Echiquier cover some 2,000 companies in more than 40 countries. Each stock investment results from a method involving four stages.
Meeting
Financière de l’Echiquier’s management method is based on the simple conviction that “a company is made by its personnel”. Systematically meeting with managers is therefore a key factor that helps us gain in-depth knowledge of companies.
Financière de l’Echiquier’s teams organise more than 1,000 meetings a year.
Assessing
Each company is then assessed on an internal grid including six criteria:
- Management quality.
- Financial structure.
- Earnings visibility.
- Growth prospects.
- Earnigs surprise.
- Social and environmental responsibility.
Valuing
Company valuations are at the heart of Financière de l’Echiquier’s method. In-depth financial analysis undertaken internally leads to demanding targeted buy and sell prices before any investments acts are made. Setting a purchase price enables us to fix the price beyond which it does not seem reasonable to acquire shares in the company. The sell price is a medium-term valuation target enabling us to remain disciplined with shares in the portfolio once the price is reached.
Documenting
Once we have met, assessed and valued a company, it becomes the object of an investment case.
A one-page overview sets out the fundamental reasons for investing in the company and all investment cases are archived in a database. This shared memory tool for Financière de l’Echiquier’s research is a means of sharing information and reminding us of the fundamentals underpinning the investment case when phases of euphoria or fear take the markets by storm.
