How we Invest

The investment philosophy is built on taking a medium to longer term view of value which means the Company tends to buy and hold individual stocks for the long term based on a selection criteria which, in summary, comprises a focus on:

  • formulation and execution of the business strategy of the companies in which we invest and their underlying business value; and
  • key financial indicators, including prospective price earnings relative to projected growth, sustainability of earnings and dividend yield (including franking) and balance sheet position including gearing, interest cover and cash flow.

Investing in this sector can be subject to greater volatility compared with investing in larger capitalised companies because of the reliance these smaller companies have on single markets, products and/or key individuals. From time to time, shares in these smaller companies may also be subject to lower than normal liquidity. Consequently, this section of the market requires a significant amount of research and subsequent close monitoring of the portfolio.

In this context, Mirrabooka is willing to move quickly to realise investments when we form a view for risk management purposes that an investment is well overvalued or there has been a material adverse change in a company’s circumstances or prospects. As such, we believe it is important to be nimble and responsive to material changes affecting these investments.