Sionna’s Investment Process

Value: A Bottom-up Approach to Investing

Sionna assesses the value and quality of individual companies from the bottom up. We:

  • Opportunistically invest in good businesses when they are temporarily undervalued
  • Identify candidates through comprehensive fundamental analysis by:
    • Getting behind the numbers
    • Understanding business fundamentals
    • Assessing management quality

To be successful over the long term, this process requires inquisitive minds, good judgment and a passion for investing.

Relative Value

“Sionna doesn’t ask stocks to go places they’ve never been before… only for them to do what they’ve done in the past – revert to their intrinsic value.” – Teresa Lee

Sionna specializes in a relative value method. History informs our process: we believe stock prices revert back to their mean (intrinsic value) over time. When determining the value of an individual company and whether a stock is undervalued, we consider where it has traded historically relative to the overall market and other names in the sector.

Screening for Ideas – Quantitative Analysis

We’ve developed a proprietary screening tool – Sionna’s Intrinsic Value Model (IVM) – to focus our attention on 70 to 140 of the highest-potential stocks. The IVM:

  • Produces a mathematical estimation of intrinsic value for individual stocks
  • Helps us narrow our qualitative research focus to stocks that are attractively valued

Fundamentals – Qualitative Analysis

We start with Sionna’s Research Questionnaire to draw out all aspects of a company in a disciplined manner. At this point in the process we:

  • Investigate a company’s risks (cyclical, operational and financial)
  • Complete an in-depth analysis of financial statements
  • Have face-to-face meetings with management
  • Arrange on-site visits with management
  • Conduct other competitive reconnaissance