Juntoku International | Research

Research

A highly experienced team of global investment professionals—provides guidance on asset allocation and portfolio diversification.

We invest using a strict discipline in an effort to ensure we do not overpay for these earnings. Research and Valuation are our key focus and is the primary determinant of long-term outperformance.

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Research and Analysis

Our analysts are at the heart of what we do in terms of research and analysis. Their goal is to be industry experts who know everything there is to know about our portfolio holdings. They continually analyze our current assets and uncover new investment opportunities by comparing the quality and value of our fund's holdings to firms in the broader market through a vast range of resources.

First and foremost, our experts assess the quality of the business. They study the company's past and present operational and financial performance to have a thorough understanding of the business. They evaluate the company's quality to that of its competitors and interact with the company's management. Our analysts always get to know management fairly well due to these regular interactions because we hold equities for a long time. The longer we own a company, the more knowledge we acquire about it.

The analysts estimate the company's absolute and relative fair value by evaluating the company's previous profitability:

  • Earnings sensitivity
  • Multiple expansion potential
  • Net asset value

Our experts use all of this information to complete a rigorous Investment Grade Rating Checklist, which results in an overall evaluation of a company's quality. This grading system serves as a risk management tool by restricting the portfolio manager's maximum weighting in a specific position. As the grade progresses from the lowest acceptable to the greatest acceptable quality, the maximum permissible weighting increases.

The analysts prepare a complete research report that contains all of their findings as well as a buy or sell recommendation to communicate their views to the portfolio manager.

Among the activities of our research analysts are:

  • Capturing and evaluating multiple years of financial history.
  • Examining the company's operations, industry, and past performance.
  • Interviewing the management.
  • Informally interviewing customers, suppliers and competitors whenever possible.
  • Comparing the company’s financial characteristics with those of its competitors.
  • Obtaining the Fixed Income team's perspective on the balance sheet strengths of the company.
  • Estimating the potential and downside of a stock price through a complete scenario analysis.
  • Completing a quality Investment Grade Checklist.
  • Performing a thorough, in-depth research report.

Juntoku International's Investment Committee interferes when an analyst issues a purchase recommendation and discusses the analysis with the portfolio manager. The committee, which includes members from the Fixed Income, Local Equity, and Foreign Equity teams, evaluates the analyst's argument for adding a new business to the portfolio. Committee members examine the analyst’s review in depth to ensure that the research has been conducted accordingly.

The committee has the authority to question the investment grade rating and ask the research analyst to perform more due diligence. While the portfolio manager considers the committee's feedback to assist with the evaluation of the company's worthiness, he or she has ultimate control over which businesses are included in the portfolios.