Stone Run Capital’s investment philosophy focuses on investing in quality companies at a reasonable valuation. We believe the best strategy to create and sustain long-term wealth is to:
- Protect client capital in down markets
- Provide competitive risk-adjusted returns throughout an investment cycle, which we measure as five to seven years
We measure quality through an assessment of:
- Leading quantitative financial metrics such as return on invested capital, free cash flow generation, and persistent and predictable growth
- Leading niche market position(s) and pricing power
- Proven senior leadership
We assess valuation using a combination of:
- Total enterprise value metrics relative to operating profit, operating profit before depreciation and amortization, net income, and free cash flow
- Economic value added (EVA) generation
- Analysis of incremental change in growth and profit
