Investment Criteria
In order to accommodate its guiding principal (“Capital appreciation is important but capital preservation is paramount”), CCM seeks to invest in companies that typically have several of the following characteristics*:
- Attractive valuations (probably the most important factor)
- Consistently profitable (less likely to go out of business)
- Simple, predictable and easy to understand businesses (minimize surprises)
- Ability to generate significant cash flow (no need to borrow in order to grow)
- Proven track record of success
- Manageable debt levels (high debt levels are a major reason for bankruptcies)
- Modest economic sensitivity (avoid highly volatile industries and companies)
- Good long term company and industry prospects
- High barriers to entry (not easily replicated or replaced)
* When making investment decisions, CCM may void one or more of the above
criteria