Investment process
Moat Investing follows the principles of value investing, one of the most respected schools of thought in finance. Our process is carefully designed around nine steps that build on its rich history.
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Research and screening
Drawing on the wisdom of value investing pioneers such as Benjamin Graham and Warren Buffett, we research and screen the market for promising opportunities: companies with robust competitive advantages and undervalued assets that can grow over the long term.
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Fundamental analysis
Once we identify candidates, we analyze them in detail: financial statements, business model and competitive position, industry trends and dynamics, and growth prospects.
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Moat identification
We put strong emphasis on durable competitive advantages. Moats come in many forms, such as strong brands, proprietary technology, economies of scale or high barriers to entry. Investing in companies with robust moats helps us capture long-term value and shield our portfolios from competitive threats.
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Intrinsic value calculation
We estimate the intrinsic value of each opportunity using methods such as discounted cash flow (DCF) analysis, earnings power value (EPV), valuation ratio comparisons and other appropriate models.
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Margin of safety
We aim to buy at a significant discount to estimated intrinsic value. That buffer protects against errors in our valuation and against market fluctuations.
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Long-term investment horizon
We hold investments for extended periods, giving the market enough time to recognize the underlying value and the investment thesis enough time to play out.
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Risk management
We assess the financial, industry and company-specific risks of every potential investment, and we manage downside risk through diversification and ongoing monitoring.
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Portfolio construction
We build diversified portfolios, carefully balancing allocations across sectors, industries and market capitalizations to manage risk and optimize potential returns.
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Ongoing monitoring
Once invested, we continuously monitor our holdings, including changes in the companies, their industries and market conditions, and we regularly reassess each thesis to confirm it remains intact or to adjust when needed.
Want to see the process in action?
Our published analyses apply these steps to real companies.