Managed funds - Australian small caps
| Overview | Ratings | Methodology | Investment team |
Methodology
Investment philosophy
Avoca’s investment philosophy is based on the central principle that any asset’s value is solely determined by its likely future cash flows discounted back to today. In the context of equities, the team believes that in order to forecast future corporate cash flows with requisite accuracy, deep fundamental research at both the company and industry level is required. At its heart, Avoca is a research organisation.
Investment style
Avoca is a fundamentally based active, core manager. The team focuses on estimating fundamental values for stocks which forms the basis of all investment decisions.
Investment process
The investment process is based on in-depth, fundamental stock research, detailed financial modeling of stocks and a discounted cash flow (DCF) valuation methodology. Combined, these factors enable the team to arrive at an intrinsic value for each stock, which is then compared to the prevailing stock price to determine relative value.
Given the large number of stocks in the team’s investable universe, Avoca also employs quantitative screens and filters that help identify stocks worthy of further analysis through their fundamental research process. Company meetings with a wide range of relevant people and organisations form a key part of their research process.
