Armytage private Limited

Our Investment Criteria

The main tenet of our investment process is the early identification of companies that are capable of producing above average returns, which are expected to maintain a track record of consistent and replicable earnings (and dividend) growth. We are pro-active when identifying prospective investments, avoiding the inflated multiples that result from a company becoming a "market darling".

With a joint aim of capital appreciation and income in core investment mandates, we take interests in large capitalisation as well as emerging medium, small and micro capitalisation companies.

We have a disciplined step-by-step approach to researching companies we invest in. Our approach is centred on a comprehensive level of analysis. Using our specialised research program we screen the Australian share market to identify stocks that meet our criteria: strong return on equity, consistent revenue and earnings growth, a modest cash flow multiple and a competitive advantage within their industry. Research inputs are devised from three sources:

The internal resources of Armytage private;
External third parties such as stockbrokers.
From within the company; Armytage's resources.

Armytage private thoroughly investigates prospective investments to assess both risk and upside potential. This is achieved by conducting due diligence reviews of the available literature, and by conducting on-site management interviews. We seek firms with strong balance sheets that can internally finance future growth and with high cash flows indicative of potential high dividend growth. Rigorous adherence to the selection criteria enhances our ability to control portfolio risk.

Strategic Opportunities

A major feature differentiating Armytage from other investment managers is the opportunity to take advantage of strategic or special situation investments.

As part of its investment process, Armytage seeks to identify:

listed companies which are being discounted by the market, but still retain an asset (tangible or otherwise) which, in Armytage's view, is of significant value to one or more third parties; and
companies that are unlisted but are seeking quotation within 6-12 months where Armytage considers it can obtain a lower entry price than the value to be ascribed to the securities when they come to market.

Each situation would be comprehensively researched to ensure it meets or is capable of meeting Armytage's other investment criteria.

Armytage would seek to have its client portfolios, including the Fund, together acquire a 5% or greater stake in these target companies. This allows Armytage to control a significant stake in a security where there may be scope for potential corporate activity, and consequently, additional value.