Stock portfolio: Quality
Johan Widmark
Quality company
at the right price
The Quality share portfolio is based on a quantitative screening to capture high-quality companies with stable growth and profitability, with healthy balance sheets and return on capital.
To ensure that we are not paying too much for these quality companies, we apply a filter with a requirement of 2-3% FCF yield (cash flow as a percentage of market capitalization).
Screening criteria
The criteria for the companies in Quality are
Stable growth: Three-year average sales growth over 8%
Stable profit growth: Three-year average earnings growth over 10%
Healthy balance sheet: Net debt / EBITDA < 3x
Good profitability: EBIT margin above 10%
Good yield: Return on invested capital (ROIC) >15%
Acceptable valuation of cash flows: FCF yield > 2%
Development
As of 19 Dec 2024, an equally weighted portfolio consisting of the 10 shares in Quality is up 32.7% in one year. It can be compared with MSCI Sweden, which is marginally down during the same period.
33%
Return 1 year, as of 2024-12-19,
compared to -1% for MSCI Sweden
The returns shown are based on model calculations and do not reflect actual results. Historical returns are no guarantee of future returns. See full disclaimer below. Source: Koyfin, Incirrata.
Feel free to contact us for more information about the shares currently included in the portfolio.
Read more here
Theme portfolio
Incirrata's thematic portfolio consists of 10 funds and ETFs selected according to 10 growth themes: AI and Technology, Aging Population, Space, Gaming & eSports, Global Healthcare, Chip & Semiconductor, Crypto and Cybersecurity. The portfolio has a Sharpe of 1.0 and annual average return of 21% per year.
Strategy portfolio
Incirrata's strategy is based on a model portfolio consisting mainly of shares and a smaller portion of selected products, for the best combination of long-term value growth and risk management. The portfolio has a Sharpe of 0.88 and average annual return of 14% per year.
Why US stocks?
The USA is not only the world's leading economic and political superpower but also the one that holds the greatest opportunities. With a unique combination of democracy, structure, military might, and entrepreneurial spirit, the country has repeatedly demonstrated its strength. However, one often overlooked factor is its unique geography – providing American companies with unparalleled conditions to continue succeeding.
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Disclaimer
This marketing document has been issued by Incirrata AB. It is not intended to be distributed to, published for, made available to or used by individuals or legal entities that are nationals or residents of any state, country or jurisdiction where applicable laws and regulations prohibit its distribution, publication, making available or use. It is not directed to any person or entity to whom it would be illegal to send such marketing material. This document is for informational purposes only and shall not be construed as an offer, a solicitation or a recommendation to subscribe, purchase, sell or hold any security or financial instrument or to enter into any other transaction, such as the provision of investment advice or services, or as a contract document. Nothing in this document constitutes investment, legal, tax or accounting advice or a guarantee that any investment or strategy is suitable or appropriate for an investor's specific and individual circumstances, nor does it constitute personal investment advice to any investor.
This document reflects information, opinions and comments from Incirrata AB. at the time of its publication, which are subject to change without notice. The opinions and comments expressed by the authors in this document reflect their current views and may differ from conclusions in Incirrata AB's services or products, or third parties, who may have reached other conclusions. Market valuations, terms and calculations stated here are estimates only. The information provided comes from sources believed to be reliable, but Incirrata AB does not guarantee its completeness, accuracy, reliability or timeliness. Historical performance does not provide an indication of or guarantee of current or future performance. Incirrata AB assumes no responsibility for any loss arising from the use of this document.