Quality companies
Eight factor 'Quality Lens' assessment
Attractive valuations
Exploit mispriced opportunities
Concentrated but diversified
Typically 25-45 holdings
Active
High active share
The Tura Capital investment team are fundamental, long-only investors, focused on quality global small and mid cap companies (SMID). Quality companies are well placed to deliver strong investment returns through economic cycles. A concentrated portfolio of quality companies enhances the opportunity for outperformance.
Investment Philosophy
Beliefs
- Active management is critical in global small and mid cap companies (SMID)
- Quality businesses generate higher return on invested capital (ROIC) which can be reinvested to drive sustainable growth
- Quality businesses outperform through the cycle, but the purchase price matters
- ESG contributes to a company’s quality characteristics
- Portfolio risk management is crucial
Quality defined
- Superior industry structure
- Sustainable and/or increasing competitive advantage
- Low earnings risk
- Low ESG risk
ESG Risk reflects ranking of ISS Performance Scores within Tura Capital’s investment universe.
Tura Capital’s transparent investment process
Quality Lens
Tura Capital’s company research process is structured around our proprietary Tura Capital quality lens. The quality lens combines financial data with deep fundamental research, to identify high quality global small and mid cap comnpanies.
Balance sheet
- Gearing and leverage
- Interest cover
![](https://www.turacapital.com.au/wp-content/uploads/2023/10/Balance-Sheet1-628x0-c-default.png)
ESG
- ESG performance score
- Governance focus
- Financial impact of environmental and social issues
- Tura Capital utilises ISS ESG Corporate Rating scores.
- ESG is weighted at 15% in Tura’s quality screen.
![](https://www.turacapital.com.au/wp-content/uploads/2023/10/ESG1-628x0-c-default.png)
Returns
- ROE, ROA and ROIC
- Trend in returns
![](https://www.turacapital.com.au/wp-content/uploads/2023/10/Returns1-628x0-c-default.png)
Margins
- EBITDA and net profit margins
- Trend in margins
![](https://www.turacapital.com.au/wp-content/uploads/2023/10/Margins1-628x0-c-default.png)
Earnings quality
- Free cash flow conversion
- Predictability of cash flows
![](https://www.turacapital.com.au/wp-content/uploads/2023/10/Earnings-quality1-628x0-c-default.png)
Industry quality
- Industry growth rate
- Porter analysis
![](https://www.turacapital.com.au/wp-content/uploads/2023/10/Industry-quality1-628x0-c-default.png)
Company competitive advantage
- Product
- Strategy
- Capital
- Management and incentives
![](https://www.turacapital.com.au/wp-content/uploads/2023/10/Company-competitive-advantage1-628x0-c-default.png)
Risk
- Earnings risk
- Balance sheet risk
- Agency risk
![](https://www.turacapital.com.au/wp-content/uploads/2023/10/Risk1-628x0-c-default.png)