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.
At the same time we concentrate on stocks where there is an active options market. This is intended to give scope for the writing of predominantly exchange traded options with the level of the portfolio ‘covered’ by call options typically ranging between 20 to 50 per cent of the total portfolio at any one time.
Djerriwarrh has also in the past issued convertible notes and has access to lines of credit that allow the Company to gear its Balance Sheet when appropriate investment returns are available to enhance shareholder returns.