When investing in businesses, whether listed on the stock exchange or unlisted, there are some specific qualities that investors should look for. These qualities are like a list of ingredients to a great recipe.
The recipe for operating a high quality business is to have a business with:
– Wonderful long-term prospects
– A sustainable competitive advantage
– Strong history of earnings growth
– Minimal capital expenditure
– Reliable cash flow
– Little or no debt
– Able and trustworthy management
It sounds so simple, however, it is in reality very difficult to achieve. It takes a lot of time and effort to develop and run a high quality business. It is businesses with these rare qualities which we at Edge7 look to invest in. When you find a business that possesses the ingredients to this recipe trading at a fair price, it is time to invest and let the recipe rise the soufflé over time.
This article is published by Dean Mico.
The information provided in this article is intended for general use only. The article is intended to provide educational information only. Please be aware that investing involves the risk of capital loss. The information presented does not take into account the investment objectives, financial situation and advisory needs of any particular person nor does the information provided constitute investment advice. Under no circumstances should investments be based solely on the information herein.