Valuation Archives - MULTI-ACT


Don’t Confuse Cheap with Value

By | What We Are Reading | No Comments

There are just two ways to behave as an investor,

One requires buying cheap, selling at a profit, and repeating the process. This requires making hundreds, sometimes thousands of smart investment decisions in the course of a career. To make many smart decisions is too hard.

The second way to invest just requires one decision: buy a great business. This way is to adopt a strategy that requires being smart only a few times. Almost no one does this despite the obvious advantages. It requires the right investor base.  This article shows you how.

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Value stocks and Patience – may be the only way to turn around Bleak Returns

By | What We Are Reading | No Comments

It is a terrible time for investors. With bleak returns seeming to be the norm across the globe in this tumultuous stretch, they are relying on varied valuation metrics in hope of enhancing dividends. This piece discusses the best valuation metrics to gauge whether a stock is “cheap” or “expensive” and also provides an insight into Andrew Lapthorne’s views on why modern-day investors have to be brave to hold on to value stocks and be prepared to lose money for some time.  Read More


U.S. Regulated Utilities: Non-Cyclical or Cyclical?

By | Company Insights, Global Equity Perspective | No Comments

In This Article:

As some of the best-performing stocks, many consider U.S. Utilities stocks a safe haven paying steady dividends with moderate risk. Assured return close to 11% shows why investors are attracted to this sector making them a bright choice in bear and bull markets. However, there is a caveat: Whenever rates rise, the value of these may drop. With the Central Bank’s repressive rate policy, we believe investors should show caution when making investments in U.S. Utilities equities.

This article discusses how U.S. interest rates seem to have given rise to a cyclical trend within the Utilities sector. Read what has been driving the sector’s current valuation growth.  
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Global Macro View

By | Global Macro | No Comments

In this Article:

Listen in on a conversation between Multi-Act experts and their advisory clients. Find answers to questions such as:

  • What can we expect with fluctuating interest rates, particularly U.S. interest rates, which have a large impact of flow of funds globally?
  • Where is the U.S. dollar going as it appreciates against other currencies? How is the Rupee placed?
  • What is China’s impact on the global economy and how is it likely to all pan out?

Get expert insights into these questions and more in this transcript of a conference-call hosted on 19th February, 2016 with our Advisory Clients.

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Economies of Scale: An Analytical Framework for Assessment of A Firm’s Competitive Advantage

By | Global Equity, Investment Insights, What We Are Writing | No Comments

This article originally appeared on Advisor Perspectives.

“The moat in a business like our auto insurance business at GEICO is low cost. I mean people have to buy auto insurance, so everybody’s going to have one auto insurance policy per car basically, or per driver. And…I can’t sell them twenty…but they have to buy one. Read More


Growth Vs Value Cycle

By | Global Equity | No Comments

Investment decisions need to be based on rational analysis and void of behavioral bias. However, markets often act without clinical analysis and prefer different type of assets in different phases. One such example is emerging across the growth stocks and value stocks, where the favor or disfavor for a particular class changes over the course of a market cycle. Read More


The 6 Sources of a Firms Competitive Advantage

By | Investment Insights, What We Are Writing | No Comments

This article originally appeared on Advisor Perspectives.

As we have discussed previously, sustainable competitive advantages (SCAs) are a key characteristic of high-quality businesses. While SCAs are good indicators of business quality, not all competitive advantages are created equal.  The strength of the competitive advantage and the risks that the business needs to protect itself against are largely dictated by the type of competitive advantage that the business possesses. Read More


Quality of Earnings: A Sound Filter Board to Avoid Permanent Loss of Capital

By | Corporate Governance, Investment Insights, Quality of Earnings | No Comments

Investors invest in the stock market based on the odds of reward and risk, but the odds are not always easy to calculate. Multi-Act’s Quality of Earnings analysis is utilized to judge the congruence between the economic earnings of the firm and the integrity of its balance sheet. Read More

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