Sierra Investment Partners, Inc. chose Edinburgh Partners Limited because of its proven investment process. The Emerging Markets Equity strategy provides a simple and clear investment philosophy. Through disciplined and intensive research we identify stocks which we believe are undervalued. It is our belief that such undervaluation arises because the stock market’s investment horizon is too short. We aim to provide our clients with an absolute return and stocks are therefore not included in our portfolio by reference to an index weighting. We believe that a stock price is driven by the company’s future profits and so for every potential holding we forecast profits, cash flow and balance sheet over the next five years. We then apply our own valuation basis to these forecasts to produce an estimate of what the price should be. Only if this intrinsic price is well above the current share price would we consider buying the stock. As we are long-term investors we stress the need for patience in investing.
We believe time horizon is the key market imperfection
Company analysis is our most important activity – experienced investment team
Concentrated portfolios – diversification achieved in 35-45 holdings
Identify undervaluation and have the patience to hold until shares reflect long-term earnings
Potential –over the short term, markets driven by emotion, not fundamentals