Our paramount objective is to achieve market-beating returns through a strategic approach—taking long positions in undervalued listed stocks, spanning both mid & small cap as well as large-cap stocks. We meticulously target companies with burgeoning businesses and a trajectory of improving returns on capital. Our commitment lies in entering these enterprises at valuations deemed fair to highly attractive, steadfastly holding our positions until their maximum upward potential is unlocked.
Our strategic focus centers on establishing long positions in listed companies that command leadership positions in their respective product segments, regardless of their size. We prioritize companies boasting a proven track record, high-quality businesses with robust growth potential, impeccable management, and clear visibility of medium-term expansion.
Our discerning approach places special emphasis on analyzing a company's returns on incremental capital employed (I-ROCE) in recent years. We give preference to companies that exhibit higher I-ROCE compared to their past returns on capital employed (ROCE). Additionally, our stringent stock selection criteria revolve around real cash flows and cash flow-to-enterprise value (EV) yields.
In the pursuit of minimizing sector-specific risks, we adhere to prudent sector allocation weights, ensuring a diversified portfolio that guards against over-dependence on any single sector. The fund's strategy is grounded in a flexi-cap approach with a distinct bias towards mid-cap and small-cap stocks. This ensures a dynamic investment stance, poised to capture opportunities across market segments.
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At Monarch Networth, we acknowledge the expansive and intricate landscape of investments. Our pledge to you, esteemed investors, is a resolute commitment to deliver a focused and meticulous approach, ensuring that your investments are steered with unparalleled precision and confidence.
Our philosophy, while simple, is profoundly effective: Understanding that the global terrain of investments is extensive, we assert that focusing on everything is impractical. The crux lies in identifying the appropriate filters and meticulously refining your focus list. This philosophy serves as the bedrock of our entire strategy, ensuring that each investment decision is characterized by purpose and clarity.
Concentrated portfolios stand as the cornerstone of our investment strategy, with all our portfolios intentionally limited to 20-25 stocks. We recognize that concentrated portfolios are more manageable, affording us the ability to devote meticulous attention to each investment.
Rigorous Stock Selection: We place paramount importance on stock selection. Our meticulous process involves filtering listed companies based on critical parameters, including market capitalization, accounting quality, corporate governance, returns, cash flow, growth, and cash flow conversion from profits. The outcome is a select list of approximately 75-80 companies that constitute our carefully defined portfolio, with limited exceptions, if any.
Entry Valuations for a Safety Margin: Our vigilance extends to valuations. Acknowledging the pivotal role of precise entry and exit pricing, we adhere to the fundamental principle that the merit of an investment is contingent upon its valuation. This disciplined approach safeguards us against succumbing to market fads and trends, mitigating the risks associated with a 'buy at any price' mentality.
Connect with Monarch Networth Capital Limited
For inquiries or assistance related to our financial services, feel free to reach out to our dedicated team.
We are committed to providing prompt and reliable support. You can write to us at
monarchaif@mnclgroup.com
Your financial success is our priority, and we look forward to assisting you in your journey.