Ascertaining Real Corporate Value
We measure the actual value of a company from three perspectives: quality of management, business model, and market growth potential.
SPARX's Investment Philosophy
Macro is the Aggregate of Micro
This consistent investment philosophy is the hallmark of SPARX.
Macro is the Aggregate of Micro.
The faithful practice of this investment philosophy since our founding is the essence of SPARX.
Our experienced analysts meet directly with each company to conduct in-depth research.
They assess each piece of information, which was acquired on-the-spot, and transform into concrete investment ideas and selection of individual stocks.
Furthermore, we thoroughly pursue the true value of a company by having multiple analysts examine and discuss it with each other.
We believe that this thorough bottom-up research approach leads to results that generate long-term, stable returns.
Key points for finding growing companies through bottom-up research
What is a Value Gap?
The value gap occurs when there is a difference between a company’s intrinsic value and its market value (i.e., share price).
In many cases, a company's share price and intrinsic value do not match for one reason or another. The presence of a value gap represents an investment opportunity.
The larger the value gap, the more likely the company will be a candidate for investment, but that alone is not enough.
Searching for Catalysts (triggers and factors)
onsidering catalysts that may narrow the value gap.
Catalyst (triggers and factors): A catalyst is a trigger or factor that promotes convergence of a company’s share price and its intrinsic value (closing the value gap). Identifying catalysts is another crucial element of SPARX’s research efforts.
Example catalysts
While there are external factors such as deregulation and changes in accounting standards, internal factors such as changes in corporate governance are extremely significant.
Investment Approach
The reproducibility of our investment approach stems from the SPARX DNA.
To succeed in investing, you must do something completely different from others yet get the right results.
That requires investing patiently in a limited number of unique ideas thoroughly researched with an entrepreneurial spirit.
Such investments are not easy, even for professional investors like us.
Sustaining such investments requires a consistent investment philosophy and rigorous discipline.
SPARX's investment model depends on being thoroughly disciplined in keeping a philosophy of buying stocks for thoroughly researched companies that inspire belief in their quality even when they are losing share price value and holding on to them as long as their businesses are not suffering from structural value loss.
We instill a consistent investment philosophy and methodical approach throughout our management team.
Vision
Philosophy
Reproducible
Four driving forces comprise our reproducibility.
The fund manager and analyst's perspective provides keen insight.
We focus on corporate engagement and thoroughly researching individual companies.
We are confident in our ability to find value gaps more quickly and with greater precision than
anyone else.
We package investment strategies and deliver them to our clients as investment products.
Korea All-cap Strategy
SPARX Korea All-cap strategy is designed to generate excess returns in the Korean market in the mid to long term in order to maximize capital growth by investing in structural growth stocks where the fundamentals of the company are continuously improving due to structural factors rather than short term performance changes due to the economy, and investing in dividend-paying companies with a competitive advantage and market power.
Korea Mid & Small-cap Strategy
SPARX Korea Mid & Small-cap strategy is designed to pursue mid to long term profits by constructing a portfolio focused on listed small and mid-cap stocks through bottom-up research of companies with clear factors to bridge the value gap between the stock price and the undervalued corporates relative to their growth potential among small and mid sized stocks marginalized in the market.
Japan All-cap Strategy
Japan All-cap Strategy is designed to invest in companies that can achieve quality growth, including fundamentally sound and safe business, sustained competitive advantage, above average return on equity, sustainable revenue growth, and sufficient cash flow generation, which purse profits by long-term capital evaluation over 3 to 5 years.
Japan Mid & Small-cap Strategy
Japan Mid & Small-cap Strategy is designed to invest in companies that are differentiated from the stock market consensus in order to purse profits by conducting thorough bottom-up research on companies to achieve mid to long term growth and continuous structural growth, as well as companies that are neglected in the market with low valuations and underperforms.
India Focus All-cap Strategy
SPARX India Focus All-cap Strategy is designed to invest in companies with proprietary business at reasonable valuation in growing industry categories over the medium to long term. Its strategy seeks returns by investing in India’s dominant companies with long-term return potential, focusing on companies with 1.5 times growing GDP and companies providing returns on capital in excess of 5%. (Reference Index : MSCI India Index (USD))
One Asia Investment Strategy
SPARX One Asia Investment Strategy is designed to apply the concept of Sustainable Development Goals (SDGs) to contribute to future social development by making long-term investments with the goal of ten bagger, and pursues profits based on thorough corporate research by Sparx managers. (Reference Index : MSCI AC Asia ex Japan)