In the consumer world, shoppers who try to find goods priced below their true worth are called bargain hunters. In the financial world, they’re called “value investors.” Since our inception in 1990, we have been and continue to be a value investor, looking for undervalued assets that will grow after purchase.
FinArc does not simply look for cheap assets, however. We seek out high-quality companies that are priced like low-quality companies – an investment philosophy that must be coupled with patience and discipline. Value investing, when performed properly, is not about emotions or instincts. It involves a scientific approach. At FinArc, we use metrics like price/earnings ratios, profitability and improving profit trends, growing market share, and proven, successful management teams to determine which assets are priced below their true value.
One of the keys to making value investing work is to recognize that knowing when to get out is just as important as knowing when to get in. Prior to purchasing any security, FinArc assigns target prices at which we will buy and sell, and the range in which we will allow the price to fluctuate while holding it. Our analysts may adjust price targets to incorporate new information, but identifying target prices prior to owning the security helps us invest with discipline.
Our clients are attracted to value investing as a proven and intuitive approach. Some companies can be great operators, but if the stock price is too expensive it may not generate great returns. FinArc’s target prices are grounded in the fundamentals of a company, not just a hope that someone will be willing to pay more for a stock in the future.