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.
Strategies
SPARX Korea Next Growth Strategy
The investment strategy aims to provide long-term capital appreciation by investing in companies that could lead to the next growth for Korea with a 3+ year investment horizon through a diversified portfolio of fewer than 50 Korean listed companies. The ideal investment targets possess sustainable and straightforward business models, and strong, long-term growth-oriented management, backed by well-capitalized balance sheets and resulting in above-average ROE and earnings growth.
SPARX Korea All Cap Strategy
The investment strategy aims to achieve mid to long-term capital appreciation by investing in Korean companies across all market capitalizations. The strategy follows a benchmark-agnostic, fundamental bottom-up investment approach, focusing on companies with identifiable catalysts that can drive earnings growth and narrow the gap between market price and intrinsic value. Key investment themes include new product cycles, market expansion, supply shortages, and enhanced shareholder returns.
SPARX Japan Mid and Small Cap Strategy
The investment strategy aims to achieve mid to long-term capital appreciation by investing in Japanese companies that have a sizable discrepancy between their stock price and actual value, also known as the value gap. The strategy will focus on investing in 30 to 40 small and medium-sized market cap companies.