Inview

Stock Selection
Process

Portfolio Management Process
At InView, we consider Portfolio Management to be as important to client performance as Security Selection. We seek to optimize the return potential of our portfolios while minimizing risk in order to add incremental returns to client performance.

The essential objectives of our portfolio management process are to:

Overweight investments in client portfolios exhibiting the highest potential returns (as measured by IRR) where we have sound conviction in the validity of our ownership thesis.
Normal-weight investments in client portfolios with competitive returns where our ownership thesis is proving to be valid.
Underweight investments in client portfolios with competitive returns where the validity of our ownership thesis is untested.

At InView, we make our portfolio decisions with forethought using a rigorous process combining the robust functionality of our Investment Database with ongoing research. Our Investment Database is the primary facilitator to our portfolio management process as it calculates daily the expected returns (IRR) of a cross-section of investments and research companies. It presents us at all times with an insightful up-to-date view of the market.

We generate a daily Expected Return sort in our Investment Database which rank-orders IRR (from highest to lowest) across all investments and research companies. This sort allows us to answer critical questions relating to the allocation of research resources and portfolio capital to particular companies:

Which portfolio investments offer the most attractive returns? Least attractive?
The database identifies where we should spend additional research time leading to over/under weight and sell decisions that can add incremental portfolio return.
Which research companies offer the most attractive returns?
The database identifies which companies could potentially replace portfolio investments with low returns or invalid ownership theses.
How do changes in our financial model impact potential investment return (IRR)? What earnings power must be achieved to meet a required return objective?
The database allows us to quantify the impact of changes in estimates or actual business performance through sensitivity analysis. We are able to precisely quantify changes in Intrinsic Value, IRR and relative company ranking. It makes explicit what a company must achieve to meet our return requirements.

The result of our portfolio management process is the identification of portfolio actions that can be opportunistically taken to add to the portfolio’s performance potential.