5G
Strategy
Based on our experience and prevailing knowledge, we have crafted our very own 5G strategy. It is a simple yet unique strategy that covers 5 main factors of a great investment. It is our strategy behind all investment decisions we take at Yellow Jersey.
Growing Sales & Earnings
Basics first. When the sales and profitability of a company increase, the value of the company increases so do its share prices. Simple yet profound. For the same, we make sure the company has the production capacity to grow in the future and at the same time, the market has the demand to consume the products and services of the company. With an increase in sales the company benefits from economies of scale, thus, increasing overall profitability.
Gritty Management
Often the most undermined, Gritty management is one of our most crucial considerations when we invest. Knowing the management is knowing the business. We not only read but also meet and interact with management to determine their credibility. We get an in-depth understanding of how does the management operates. Understanding the rationality of capital allocation by the management is equally important. Good management understands its competitive advantage and builds the moat.
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Great Financials
The transparent, healthy, and growing financial condition of a company is of utmost importance to determine a successful stock.
What are good financials?
Balanced capital structure, income generating assets, intelligent working capital, incremental capital expenditure, low current ratio, and high cash flows.
Good
Market Leaders ​
We Identify companies with a prominent and stable market share within the respective industry it operates. In industries with high entry and exit barriers, the stability of market share becomes more ascertain. Further, we try to find out whether the company is acquiring the current market share of other players or has plans for the same.
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Why do we invest in market leaders?
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Everyone wants to buy from them,
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Everyone wants to sell to them,
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Everyone wants to invest in them.
Hence market leaders flourish during good times, sustain during tough times, get cheap financing, enjoy efficiency because of the scale, and pioneer the industry.
Growth
In Sector
We recognise sectors that are growing at 10% volume or higher and whether there is the potential for the growth to last at least 5-7 years. When a sector grows, most of the time biggest beneficiary of that growth is witnessed in market leaders. Hence a win-win situation.
Easy To Understand
Complex to Execute
This is what makes it unique and effective!