Our articles specific to the six investment strategies we offer. Whether you invest with us or are looking to invest, these
articles can you give you an insight into why we make the decisions we make.
Starting this month, we are rolling out a joint newsletter across our four domestic PMS Products. In this edition, we revisit the basic principles underlying Marcellus’ investment philosophy i.e. a firm’s ability to generate Free Cashflows (FCF) and grow them at a healthy rate sustainably over the long term. We take a look at: a) […]
Marcellus’ Global Compounders Portfolio (GCP) invests in 25-30 deeply moated global companies which are listed in developed countries. The nature of the products and services – which cater to global economic megatrends – and the moats developed around process capacity, R&D, and capital allocation, are the key factors that contribute to the consistency of free […]
Valuing lenders and insurance companies is tricky as the well accepted principle of discounting future cash flows does not work for Financial Services companies. These companies work under a regulatory framework which requires them to maintain a minimum capitalization level and also reinvest a large part of their earnings. Technically these firms have no/negative free […]
Over the last decade, while the BSE Small Cap index constituents have grown operating profits in low teens, the Little Champs constituents have consistently delivered 20%+ EBITDA growth. This has resulted in superior, consistent long term returns alongside sharper recoveries post drawdowns than the BSE SmallCap index. In recent quarters, while the fundamentals for Little […]
Just as the Moneyball approach in baseball (as explained by Michael Lewis in his book by the same name) helped a team of seemingly average players consistently win matches, in Marcellus’ MeritorQ, we select good quality and undervalued companies (rather than betting on singular ‘quality’ or ‘value’ investment opportunities) to deliver superior risk-adjusted returns. The […]
MeritorQ uses forensic ratios to evaluate the accounting quality of Indian companies. As we highlighted in our February newsletter – Forensic Accounting Using Quant Methods Boosts Returns – our accounting checks can identify accounting frauds well in advance of the actual drawdown event. Using the specific examples of two companies in this newsletter, we discuss how accounting […]
In this month’s newsletter, we ask whether the Rising Giants (RG) stocks were ‘richly’ valued when we bought them? Using an earnings growth of 20% (5% for the terminal year) and cost of capital of 12%, the median longevity implied by the then prevailing market prices for the RG portfolio rose from 8 years as at FY18-end […]
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