Deconstructing Quality, Part II

Part I of the series looked at how Burgundy assesses the quality of a business via three elements – business characteristics, financial attributes and management – and examined the specific business characteristics that help to define a quality business. Now, let’s turn our attention to the second element of quality. Bernstein Likes The Value Factor Free Cash Flow… A Lot [singleton] Financial Attributes There are three financial attributes that make for attractive investments: Strong balance sheets Low capital requirements Growth in free cash flow When selecting companies for inclusion in our clients’ portfolios, we focus on companies that have strong…