Lights, camera, compounding

Chief Investment Officer and founder of Aitken Investment Management
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When constructing portfolios, we always remind ourselves to remain true to first principles in identifying stocks for potential inclusion in a portfolio held on behalf of investors.

Specifically, we consider the economics of a business – the existence of pricing power, returns on invested capital, cash flow conversion, investment intensity and profit margin profile – together with the management team’s track record in capital allocation and responsible and ethical governance. We also do a lot of work to understand the competitive advantage a business enjoys – the true source of any long-term ability to earn excess returns on capital, in our view – and the future demand profile for a business’ goods or services.

In purchasing Disney for our portfolio earlier this year, we believe we own an outstanding business, composed of high-quality, differentiated and difficult-to-replicate assets, with a pathway to create economic value for investors for a long time to come.

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