The topic of Environmental, Social and Governance (ESG) investing is one that continues to gain in popularity. ESG investing can have different meanings to individual investors, and ESG principles can be incorporated into investment processes in a multitude of ways. At Sionna, we thought it would be worthwhile to share our interpretation of ESG principles and how we apply them to our research process.
With the number of buybacks hitting record-breaking highs, share repurchases have increasingly become a popular topic on the news. Many commentators argue that the surge in buyback activity was an impending sign that the market was set for a correction. History, and recent market weakness, tells us that there may be some truth to this belief.
Traditionally, value investors are perceived as focusing on companies that trade at low price-to-earnings (PE) and price-to-book (PB) multiples. At Sionna, we believe these traditional methods are best married with extensive fundamental analysis and a healthy dose of skepticism since multiples can be misleading in some cases.
As value investors, we often have to make the challenging decision to buy and hold a business that is out-of-favour. When faced with the opportunity to buy shares in an unloved company, the easiest option can be to avoid it altogether – along with the criticism, stress and fear that can come with deploying capital into the investment.
Oil prices have fallen significantly over the last few months due to a myriad of concerns. The magnitude of the current price drop has not been seen since the credit crisis of 2008/09. There are many reasons in the short term for this significant decline in price.
I have always been a fan of the Jelly Bean Game. You know the one: a glass jar filled with jellies to the brim and a daring sign proclaiming, “Guess the number of jelly beans, win a prize!” Whenever I see one of these in the middle of a crowded mall or tucked inside a carnival tent, I drop everything and start studying the beans.