Ranger’s Strategy seeks to preserve and grow capital by investing in stable, high quality international companies when they can be purchased at attractive valuations.
Philosophy: A Multifaceted Approach
Ranger believes that a multi-faceted approach is more versatile and effective than other investment philosophies that place undue emphasis on a single variable, such as growth rate or valuation. The Ranger investment team believes that high quality companies build substantial value for shareholders over the long term, but that markets typically focus on short-term events such as earnings surprises, news of marginal significance and macroeconomic developments. By taking a long-term view, Ranger believes the strategy has a sustainable advantage over many other market participants.
Process: Focus on Quality, Financial Strength and Attractive Valuation
Quality: The strategy incorporates both quantitative and qualitative factors in the search for quality companies. Quantitative factors include efficiency measures such as capital utilization, profitability and earnings consistency. Qualitative factors include management experience, shareholder orientation, industry position, capital allocation and growth potential.
Financial Strength: The firm evaluates a company’s financial strength based on its ability to meet its financial needs and obligations, such as general operating expenses, capital expenditures, working capital demands, research expense, debt payments, and dividends. Tests for financial stability typically include analysis of capital spending trends, working capital management, debt ratios, interest coverage ratios and dividend coverage.
Attractive Valuation: Later in the analysis, the focus shifts to companies that the team determines offer timely and attractive valuation opportunities. The investment team values companies on the basis of quantitative criteria, using benchmarks such as price/book, price/earnings and price/cash flow.
The Ranger International Strategy has produced a positive alpha vs. the MSCI All World Index Ex-U.S. since inception, June 2010. Investment results since inception are available in the Performance section.