SELECTION OF INVESTEE COMPANIES
Eminentec invests with companies across various economic sectors. In the process of individual company valuation, we utilise various eminent techniques and tools such as fundamental analysis, technical analysis and research material to enable best investment management and decision-making.
Below is a summary of fundamental and technical analysis that we utilise in the process of company valuation:
As part of fundamental analysis, we begin by reviewing the attractiveness of the broader sector or industry and how well the company is positioned strategically within it. It is paramount that the potential investee company has a strong market share that is not easily disrupted by its existing competitors or the threat of new entrants.
Depending on where an investee company is in its life cycle, it will attract different kinds of investors. We focus our decision on sustainability model, for how long the profitability can be passed along to shareholders in the form of continual dividend hikes.
A company’s balance sheet strength is paramount to its long-term survival. A good management team will know how and when to use debt financing and own equity, and maintain balance between the two. We always select investee companies who are more conservative in nature with their level of debts.
During the analysis and evaluation of the investee company’s financial results and directors’ reports, we always consider the essential to determine and interpret any potential catalysts that could impact the near-term operational outlook of the investee company.
As part of technical analysis, we identify trading opportunities by analyzing statistical trends gathered from trading activities, such as price and volume trends. We also look at the economic trends even though we don’t have control in this, but we believe that we want to be on the safe side should there be a long-term trend in the South African economy that will affect the business performance.