What makes a company great?

Great companies possess a unique combination of factors that enable them to succeed in any market condition. These factors include a lasting competitive advantage, high profitability, and strong growth potential, all of which are reflected in our key metrics

High gross & net margin

High margins are key indicators of a company's competitive advantage. Great companies with strong margins have the ability to weather economic downturns, price through inflation, invest in R&D, and reward their shareholders with consistent returns.

High ROIC

High ROIC is a critical metric for identifying companies with a competitive advantages. Companies with strong ROICs generate significant profits relative to their invested capital, allowing them to reinvest in their business, expand their market share, and ultimately provide long-term value for their shareholders.

High FCF conversion

High FCF conversion is a hallmark of great companies with strong financial positions. These companies have the ability to generate significant cash flow from their operations and translate most of their profits into cash which can be reallocated at a high ROIC, pay down debt or distributed to shareholders.

Interest cover ratio

A high interest cover ratio is critical for great companies, indicating their ability to meet their debt obligations and manage financial risk effectively. These companies have a strong financial position and operate a business model that can attain high returns without using significant leverage.

Attractive FCF yield

Attractive FCF yield is a key measure of a company's ability to generate cash flow relative to its market value. It is an important indicator of the company's value, especially compared to the market and the yield of other asset classes. While quality often comes at a price, we aim to buy at attractive valuations.

Consistent FCF growth

Consistent free cash flow growth is what drives long term stock performance. Companies can use their excess cash flow to reinvest in their business, pay dividends, pay down debt or repurchase shares, ultimately creating long-term value for their shareholders.

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CREO Quality

Our sleep tight strategy: