Davis Advisors conducts extensive research to identify businesses that possess characteristics that they believe foster the creation of long-term value, such as proven management, durable franchise and business model, and sustainable competitive advantages, along with focusing on those that are trading at discounts to their intrinsic value. Specifically, the Davis team will also screen for fundamental characteristics, including cash flows assets and liabilities, and other criteria.
Davis focuses on durable businesses with above average margin returns, strong competitive advantages and durability. Companies also have to show strong management that have been in place for over five years as long-term investors can be sure that these are ethical, honest people that will help the business last. Additionally, the management team will determine valuation or what’s the right price of the company, targeting long-term free cash flow of businesses, owner earnings and how durable the cash is available.
DWLD currently holds a large tilt toward consumer discretionary 28.4%, followed by financials 20.5% and information technology 20.4%. Top component holdings include Alphabet 6.6%, Naspers 6.0%, Amazon 5.4%, Alibabya Group 4.6% and Wells Fargo 4.2%.
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