Investment Philosophy

All Ophir Funds employ the same fundamental, bottom-up research approach aimed at identifying businesses with the ability to meaningfully grow and compound earnings over time.

We believe the best value in share markets is found in smaller, less researched stocks, where the return for research effort can be significant.

We look for companies that are:

• In, or about to enter, a structural growth phase
• Cash generative
• Able to be understood and valued by the team
• Reasonably priced for their assessed growth prospects
• Operating with sound capital structures
• Managed by high quality leadership teams
• Under-researched, under-appreciated or broadly misunderstood

Portfolio weightings of individual stocks reflect:

• The valuation gap between the current market price and our assessed value
• Our level of conviction and views on appropriate investment timing
• Liquidity and market capitalization of the company

Importantly, our Funds are constructed in such a way that individual stock weights are chosen through a benchmark unaware approach and reflect investment team conviction in a company.

Our Funds will generally not hold more than 25% of the fund in cash. We place risk constraints on how much we will hold in any one sector and manage the Fund’s exposure to market risks through the investment cycle. Where we are investing in overseas listed companies, we will seek to minimize geographic under or overweight exposure versus the benchmark.

Responsible investment is a fundamental belief that we consider is entirely consistent with, and necessary for, delivering on our Funds’ long-term return objectives. This means taking account of environmental, social and governance (ESG) risks and opportunities in the investment decision making process and exercising positive influence through our Funds’ investments.

Click HERE to download Ophir’s Responsible Investing Policy which outlines how ESG factors are incorporated into our investment process including our engagement with companies on ESG issues and how we exercise our shareholder rights at company annual general meetings.

Investment Process

Idea generation

Idea generation

• Source stock ideas
  • Company visitation
  • Brokers
  • Reports
  • Business / industry trends etc
• Industry contacts/exports

Initial stock assessment

Initial stock assessment

• Can we understand and value the business?
• Qualitative screen
• Valuation screen

Visitation program

Visitation program

• Comprehensive company visitation program
• Industry value chain (suppliers, competitors, customers)
• Expert consultant contact and visitation

Detailed bottom up analysis

Detailed bottom up analysis

• Financial modelling
• Further qualitative assessment
• Valuation – instrinsic value and relative to peers
• Detailed analysis of balance sheet
• Data loaded in proprietary database

Risk / return parameters

Risk / return parameters

• Assess company risks to achieve earnings estimates
• Assess risks to achieve stock price target
• Analyse liquidity of stock
• Stock Thesis Screen
• Determine appropriate weight of stock

Portfolio construction

Portfolio construction

• Stocks in portfolio represent best risk adjusted return ideas
• Risk Analysis
  • Sector allocation
  • Geographic allocation (eg resource vs industrial)
  • Portfolio liquidity
  • Market conditions
• Continual refinement based on share price movements

The result of the Ophir investment process are Funds comprised of small and mid-cap companies that we believe can materially grow and compound earnings over time. We seek to do this in a risk-controlled manner through investing in a diverse range of reasonably priced, high quality businesses.