Podcast: Compounding Made Simple with Dan Davidowitz
Far From the Finishing Post discusses Dan’s journey as a porfolio manager, investment guardrails, and the Focus Growth strategy's 35 year evolution.
Podcast Highlights
Dan Davidowitz, portfolio manager of Polen's Focus Growth strategy sits down with Troy Asset Management's Far From the Finishing Post podcast to discuss Dan’s background, the Polen Large Company Growth investment team, and the disciplined approach that has contributed to the strategy's longevity.
- We believe the investment guardrails implemented by Polen's Large Company Growth team allow us to narrow in on what we view to be high-quality companies that can deliver continuous earnings growth through investment in their intrinsic value. These guardrails include a sustained return on earnings of above 20%, solid balance sheets, stable or growing profit margins, and abundant free cash flow.
- Research is a fundamental part of our investment process. We strive to continuously monitor the development of our portfolio companies and the industry dynamics that could impact growth.
- Dan points to examples of "safety-like" companies that can provide stability of earnings growth and help preserve capital in down markets.
I believe what's appreciated by a long term investor is how long large, well-known companies can continue to compound for, not just the short term opportunities.
Important Disclosures
Please note that this document is a condensed summary of the full interview conducted by Far From The Finishing Post.
Specific securities mentioned in the podcast reflect the Focus Growth holdings as of March 31, 2024.
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Definitions:
Free Cash Flow (FCF): the money a company has remaining after paying operating expenses and capital expenditures.
Instrinsic Value: a measure of what an asset is worth separate from the current market price.
Return on Equity (ROE): the measure of a company's net income divided by its shareholders' equity. ROE is considered a gauge of a corporation's profitability and how efficient it is in generating profits.