Do identified New Investments warrant Purchase?
Atom's policy is that potential new inclusions in the portfolio need to be attractive in both an absolute and relative sense versus investments already within the portfolio and other investible stocks.
New investments must:
- Preserve capital by having a low risk of becoming worthless.
- Offer value relative to;
- other new investment opportunities,
- existing investments
- Have an acceptable interest cover (being mindful of the industry and the nature of any major assets under construction), and
- Be sufficiently liquid so as to be able to be purchased in quantity.
Factors assesed are both qualitative and quantitative.
Qualitative factors are tabulated after each company meeting and scores assigned. If the total score does not meet our hurdle we assume there are significant flaws in the business model.
Quantitative factors are numerous and result in a valuation target.
We only consider stocks for inclusion that meet both hurdles.