Our Approach

Approaching Value Investing From A Credit Perspective

Prospector approaches value investing from a credit perspective, with an emphasis on value based principles and bottom up fundamental analysis. Our in-house, deep dive research is key to our approach, focusing on regulatory and statutory statements when available, in addition to GAAP. We look at balance sheets first, cash flow second, and income statements last, paying special attention to marked to market balance sheets and private market value for capital intensive businesses. It’s all about the approach, and at Prospector our time-tested, consistent approach is evident in our results.

Risk management is thoroughly embedded throughout the Prospector investment process. We operate within a long established asset allocation comfort range, and don’t over bet. The investment team views equities through a credit lens, and approaches risk management from that same credit perspective. In our view, one of the most important pieces of risk management is maintaining a proper alignment of interests, and at Prospector we’ve been dedicated to that alignment for over 20 years.

  • 01

    Downside
    Protection

    Always consider what can go wrong when seeking risk adjusted returns

    Less financially leveraged companies

    Strong underlying franchise and asset values

  • 02

    Balance Sheet
    Focus

    Receives less focus by management and is harder to manipulate

    Reliable place to uncover financial improvement or decay

  • 03

    FCF
    Yield Focus

    Free cash flow yield focus results in:

    Better business models

    Lower reliance on capital markets

    Owner-oriented behavior

  • 04

    Private
    Market Value

    Asset prices set by 3rd party private market transactions

    Acknowledges difference between GAAP accounting and intrinsic value

  • 05

    In-House
    Research

    Avoid group think and the Wall Street middle man

    Sector-focused analysts perform proprietary analysis

    Detailed meetings with company managements that support original insights