Global markets headed higher again in July. Reasonable corporate results and economic data helped sentiment, as did the announcement of a variety of headline tariff deals. The global economy (and stock market) remains polarised, with the artificial intelligence (AI) investment boom reaching ever higher altitudes, whilst high interest rates and cost-of-living pressures have continued to create a more difficult backdrop for the global consumer and some other sub-sectors of the global economy. After a short interlude during the spring sell-off, global market leadership has resumed its narrow focus, with AI-exposed US technology shares and financial shares the key drivers of stock market returns.
Though it’s not my immediate wheelhouse, I raise an eyebrow to the level of animal spirits in certain pockets of the US market. Things often get taken to extremes in the investment industry. Lower quality, unprofitable US technology companies are leading the charge again, and retail trading is at frenzied highs, as is the amount of money flowing into passive momentum strategies. I quietly wonder how all that will end.
Our usual approach
Meanwhile, we continue with our usual approach – investing in quality UK companies for long-term income and growth. While we are naturally long-term holders, we remain open to change and continue to 'nudge' towards ideas in which we have the highest conviction around the combination of competitive position, valuation appeal, and growth potential. This year, this approach has led to the addition of five new holdings during the Liberation Day sell-off, the addition of Clarkson several weeks later, and another undisclosed addition this month. Additionally, we have exited our position in Microsoft, and Spectris is set to leave the portfolio due to a takeover.
During July Evenlode Income rose +2.8% compared to +2.3% for the IA UK All Companies and +4.0% for the FTSE All-Share. This brings the year-to-date return to +4.4% for Evenlode Income, +10.1% for the IA UK All Companies sector, and +13.4% for the FTSE All-Sharei. UK quality shares have been a notably unfashionable corner of global markets and the portfolio’s lack of exposure to banks, insurers and defence stocks has been a big headwind for us in the UK context.
First half results
Evenlode Income is a diversified list of very good market-leading UK companies, and recent results have been impressive in aggregate, particularly given that they are reporting on a period that featured a very high level of geopolitical and tariff turmoil. Over 80% of the portfolio has updated the market since the start of July – mostly with first half results or second quarter trading updates. Reporting holdings have posted aggregate growth of +5% for organic revenue, +7% for organic profit, and +10% for earnings per share (EPS) growth over their most recent periodii. Valuations look good too - the portfolio’s current free cash flow yieldiii is 5.3% and forecast to be 5.9% next year, and the dividend yield is 2.8%iv.
In this month’s investment view, we will run through some key themes from results and discuss a variety of holdings. It’s a relatively long read – there’s a lot to discuss!
Global consumer goods
The global consumer, and particularly the US consumer, has been under pressure over the last two years. Various factors have played their part - a sharp rise in interest rates, a rise in living costs, and the end to Covid-era fiscal stimulus – with younger and low-income consumers hit particularly hard. Along with these pressures, a backdrop of tariff uncertainty has added another layer of consumer caution.
A healing process is now underway, with real wage growth (in both the US and the UK and Europe) turning positive and interest rates beginning to fall. The fall in US interest rates, though, has been slower than one might usually expect, given the level of consumer weakness for two reasons. The first has been the huge stimulus that the AI investment boom has provided to the US economy. This echoes the late 1990s - when massive spend on internet capacity expansion held the Federal Reserve back from reducing interest rates – up until business investment finally fell into recession from 2000 and a period of sharp rate cuts began, providing relief to the consumer economy. The second factor keeping rates high has been tariff uncertainty, with the Federal Reserve taking a go-slow approach on rate reductions, until a clearer picture of tariff impact begins to emerge.
Below are some comments on key consumer goods holdings that released results in July. Although the backdrop has been tough, all these companies remain resilient and cash generative, with valuations that are unusually good.
Unilever
Unilever is gaining market share, and despite the tough consumer backdrop the company grew its organic sales by +3.4% in the first half. It is guiding to between +3-5% growth for the rest of the year, with an acceleration in key geographies such as India expected. Profit growth is expected at a higher rate than revenue. We think there is much to like about the reinvestment levels that Unilever’s management are ploughing back into the business to drive growth. Investment in brand equity as a percentage of sales is running at multi-year highs. We also like management’s increasingly focused approach – both on its 24 key geographies, and also on its 30 ‘Power Brands’. These Power Brands (Dove, Rexona, Lifebuoy etc.) now make up more than 75% of group sales, are highly profitable, and are growing ahead of average group growth. Over the medium-term, and following the spin-off of its ice cream division, management expect mid-single-digit revenue growth with a balance between volume and price. For a steady cash generator, and one of the world’s great portfolios of brands, we think the current valuation is very modest. Stripping out the company’s shareholdings in Hindustan Unilever and Unilever Indonesia, the rest of the business is trading on a Price-to-Earnings (PE) multiplev of less than 14x. The group’s dividend yield is 3.5%, backed by a free cash flow yield of 5.8%. As an aside, it is worth noting how many so-called ‘old economy’ companies like Unilever are now very sophisticated digital businesses. To use one example, Unilever is in the process of upping its social media spend as a percentage of total media from 30% to 50%, leveraging AI technology and upping its content creation by 20x. There are 19,000 post codes in India and 5,746 municipalities in Brazil, for instance, and CEO Fernando Fernandez is aiming for at least 1 - and up to 100 - influencers in each of these regions. This big step-up in social media reflects the simple fact that this investment generates a higher return on investment than any other use of marketing funds.
Reckitt
Reckitt’s interim results, released in July, were encouraging, with market share gains, better than expected results, and a raise in guidance for this year’s group organic revenue growth to +3-4%, with more than +4% expected for the core brands. Profit growth is expected to grow faster than sales. Like Unilever, Reckitt has also stepped-up investment levels in marketing and innovation in recent years, and these efforts are beginning to bear fruit. Reckitt is also focusing in on its best growth opportunities. In July, the company confirmed the sale of its Essential Home business, and management are planning to exit Infant Nutrition, once US litigation is further advanced. The remaining Reckitt portfolio (‘Core Reckitt’) is a focused and attractive list of health and hygiene brands, with the following brands representing more than three quarters of revenue: Mucinex, Strepsils, Gaviscon, Nurofen, Lysol, Dettol, Harpic, Finish, Vanish, Durex and Veet. These brands have grown at a mid-single-digit rate over the long-term, and their prospects look similarly attractive. The shares rose in July, but Reckitt still trades on a PE multiple of 16x for this year, and 15x for next year, whilst the dividend yield of just under 4% is very well supported by the company’s strong free cash flow generation. Management announced another £1bn share buy-back with results, representing more than 2.5% of shares in issue.
Diageo
Diageo has faced a challenging backdrop since late 2022, with the global spirits sector in a post-Covid hangover period, and the holding has been the biggest drag on Evenlode Income’s performance over the last three years. Full-year results and guidance reassured though, with analyst forecasts upgraded for the current year. For the full year to June 2025, organic revenue rose +1.7% and operating profit fell -0.7%. The company is guiding to low-single-digit revenue growth for the current financial year, and a step-up in profitability as efficiency gains begin to flow through. This guidance assumes no improvement in end markets – management are focusing on what they can control. Diageo is a great British company with an impossible-to-replicate portfolio of brands with authenticity and heritage. Given Diageo’s qualities, any sense that end markets are beginning to improve in coming months could, we think, lead to a significant recovery in sentiment towards the company. In the meantime, free cash flow (FCF) delivery was good in the year just finished, and management have set achievable targets for continued FCF delivery (growth of more than +10% for the current year - to $3bn - and rising from there). This FCF underpins a dividend yield of just under 4%.
Games Workshop
Games Workshop, a very different type of consumer-facing company, continues to benefit from its rich intellectual property and a loyal, growing international customer base (more than 70% of sales are generated outside of the UK). The company released full-year results last month, with the core table-top gaming business (>90% of sales) posting revenue growth of +16%. Management are aiming for growth in all regions over the coming year, as international sales continue to develop. Licence revenues also had a strong year – helped by the Space Marines 2 video game – leading to group revenue up +20% and earnings up +30%. A management priority for the coming year is to work with Amazon on the recent deal for the adaption of the Warhammer 40,000 franchise into a film and television series, together with associated merchandising rights. Games Workshop trades on a 2.7% dividend yield, supported by robust free cash flow generation and a net cash balance sheet. Return on capital employedvi – a key measure of performance for management – increased from 176% to 191% year-on-year. This unique business demonstrates classic ‘Evenlode economics’ but also adds interesting diversification to the portfolio.
Picks and shovels – Great British businesses
Regarding diversification, we greatly value the fund’s exposure to the industrial economy, via its niche and high-quality engineering and distribution holdings – including Smiths Group, Rotork, Spectris, Spirax, Halma and Diploma. It’s something that we, in the UK, have a long history of doing very well. A period of infrastructure and industrial renewal is underway globally, which has a long runway ahead – underpinned by a variety of structural trends - including the growing demand for energy security, energy efficiency, electrification, and the step-up in defence and industrial spending. We think the niche industrial companies held in the fund offer attractive, cash generative ‘picks and shovels’ exposure to these long-term trends.
Rotork
Rotork - the global market leader in actuators - released good interim results last week, posting EPS up +8%. Order book growth was solid thanks to demand across a wide range of end markets including oil and gas, methane emission reduction, water, power and broader industrial, which underpins the outlook. A key part of Rotork’s strategy is to focus on niche areas of big end markets that have strong structural growth drivers. Rotork are aiming for mid-single-digit to high-single-digit revenue growth and margin expansion over time – with profitability helped not just by operating leverage, but also by the gradual shift in demand towards electric actuators, where margins are higher than the group average.
Diploma
Value-added distributor Diploma - at its third quarter trading statement last month - reported organic growth of +10% for the first nine months of its financial year, and expects a similar rate of growth for the full year, with solid growth across a variety of its end market, including aerospace, defence, life sciences and energy.
Halma
Visiting Halma’s headquarters last month following full-year results, we discussed the diversity of growth opportunities the company have on offer. Headquartered in Amersham and employing more than 7,000 people worldwide, Halma is a group of technology and engineering businesses with leading positions in niche, growing sectors across safety, environmental and health end markets. In our view, the fund’s industrial holdings – including Halma - are well placed to benefit indirectly from increased European defence spending, as much of this allocated spend (NATO’s commitment is to head towards 5% of GDP by 2035) will be channelled towards broader industrial and infrastructure renewal, not just weaponry. Halma management made exactly this point – the management of its 52 subsidiary companies are always looking to take advantage of structural growth in both their immediate and adjacent markets, and the coming investment in European infrastructure is one example of this. It reminds me of an image that David Barber - the original founder of Halma - once made in the late 1990s: The analogy I have often used with analysts in discussing Halma is that it is like a centipede with very many little legs, but each leg moving a tiny step in the right direction. If every small move is positive and if every negative move is eliminated, then it is surprising how quickly one can move towards a defined objective. That is the long-term route.
With the takeover bid of Spectris in the late stages, we have also recycled some of the Spectris holding into another quality, niche, cash generative engineering holding. We think it brings a strong runway of growth and interesting diversification for the portfolio and will discuss further in coming weeks.
The specialist outsourcers
Another key part of the portfolio is the range of specialist outsourcers that provide value-added services to their business customers, often taking the hassle-factor away from them, enhancing efficiency and helping to drive growth. The following companies in this category have recently released results.
Compass
The global market leader in food catering, Compass continues to benefit from the steady move from insourcing to outsourcing in its markets. Outsourcing food catering comes with multiple benefits, not least a reduction in hassle-factor, better efficiency and improvement in the offer. A complex backdrop of food price volatility, changing consumer preferences, healthy eating trends, and more regulations are all underpinning this trend. At its latest trading update, Compass’s client retention had picked up to over 96%, whilst strong net new business wins, volume growth and pricing drove organic revenue growth of +8.6%. When asked whether the volatile macro backdrop had led to any weakness from slower decision-making, management noted that: the simple answer is no. The macro environment remains pretty positive for us. We believe our operating model is resilient, even more so given the work we have done on focusing the portfolio. Compass currently trades on a dividend yield of 2%, with very healthy free cash flow cover.
Intertek
A global leader in corporate assurance, testing and inspection, Intertek grew organic revenue by +4.5% and EPS by +12.3% in the first half, and reiterated guidance of mid-single-digit revenue for both the full-year and the medium-term. There are several structural drivers underpinning demand. The company’s multi-national clients (of which over 99% are retained each year) have a need for increasingly transparent and robust supply chains. The very common ‘China plus one’ strategy that many clients have been pursuing for several years now (to ensure robustness of supply in a multi-polar world) is driving incremental business for Intertek - as clients utilise more services from across Intertek’s global network. After a lull during Covid, client investments in innovation and new product development are also driving growth again in the range of products and services that require testing and assurance. In Intertek’s infrastructure and energy divisions, investments in new infrastructure and renewable technologies are also driving demand. Tariff uncertainty has kept Intertek’s valuation depressed this year, despite positive trading. As a result, the company currently trades on a dividend yield of 3.5% and a FCF yield of over 5%.
Informa
The global market leader in B2B trade exhibitions (Informa holds a 15% share in a highly fragmented market) continues to demonstrate the power of network effectsvii within its portfolio of global trade shows - which includes everything from prestigious events such as Money 20/20 and the Cannes Lions International Festival of Creativity - to other very strong - albeit less glamorous - franchises such as World of Concrete and WasteExpo. Interim results saw organic revenue grow +8% and EPS +25%. The core of Informa’s competitive advantage is its two-sided network effect with well-established events dominating their niche industries. For exhibitors, the value of participating grows as more attendees register for top-tier events. For attendees, the breadth and diversity of exhibitors provide greater choice, more innovation to discover, and enhanced networking opportunities. Revenues are also surprisingly resilient in downturns – the cost of attendance is low relative to overall marketing budgets, and it is important to represent your business at these events during the bad times as well as the good. The company is currently trading on a dividend yield of 2.6% and a FCF yield of nearly 8%.
Specialist recruiters
PageGroup (1.3% holding) and Hays (0.6% holding) are global market leaders in specialist recruitment, and the most cyclical companies we invest in. Although they have generated positive total returns for the fund during their holding periods, along with Diageo they have been two of the main performance laggards over the last three years. End markets have been very challenging since 2023, with candidate and client confidence low, leading to lower conversion rates from final interview to job offer - conversion would typically run at four accepted offers out of five jobs that get to final interview rounds, but it has been running at three out of five over recent months. Ad valoremviii fee rates have held up well, reassuringly, but the drop in placement volumes has led to a drop in net fees of approximately one third since 2023, impacting operating leverage and return-on-capital. We think the upside potential for the recruiters is substantial (they currently trade on a price-to-net-fees ratio of approx. 1x on unusually depressed fees, relative to a more normal ratio of 2x or more). With a significant exposure to the European economy for both companies, and to technical disciplines, the stimulus of a pick-up in defence and infrastructure expenditure over coming months could also be very helpful for these businesses. We have, though, reduced the fund’s position in Hays (with proceeds partially used to top-up PageGroup), for balance sheet reasons.
Data analytics
The software and data analytics holdings in the fund continue to produce positive results, with continued structural growth in demand for their proprietary data and digital services. For RELX, Experian, LSEG and Sage, organic revenue for the latest period grew at +7%, +8%, +8% and +9% respectively. RELX and LSEG’s updates were interim results, and they posted +10% and +20% EPS growth respectively.
Though never complacent, we think that the competitive positions of these companies remain very good, notwithstanding the arrival of generative AI. All these business models are different and serve different end markets. To generalise, though, key competitive advantages include deep customer embeddedness and high switching costs, network effects, proprietary (and often contributory) data, and a commitment to stay close to clients and relentlessly plough-back investment into innovating and developing new products.
All these companies have been investing in machine learning and AI technologies for many years and have been embedding them in their product offerings.
RELX summed this approach up well at recent interim results:
Our improving long-term growth trajectory continues to be driven across the group by the ongoing shift in business mix towards higher growth analytics and decision tools that deliver enhanced value to our customers. We develop and deploy these tools across the company by leveraging deep customer understanding to combine leading content and data sets with powerful artificial intelligence and other technologies. This has been a key driver of the evolution of our business for well over a decade and will remain a key driver of customer value and growth in our business for many years to come.
We had been trimming exposure in some of these names for relative valuation reasons, but the recent underperformance of share prices has begun to improve valuations again. The current FCF yields of these businesses range from 3.5% in the case of RELX, to 4.5% for Sage and 5.7% for LSEG, and growth prospects are good.
Network effectsvii
Several other companies in the portfolio possess proprietary data and powerful network effects, including the following three relatively new holdings that have all released results in recent weeks:
Auto Trader and Rightmove
Auto Trader is the leading UK platform for car buyers, with over 75% of all time spent on automotive classified sites spent on the platform. Rightmove is the number one property portal, with 80% market share. These UK-facing businesses continue to generate good growth, with EPS up +12% and +11% respectively at their latest results. Both companies currently trade on a dividend yield of 1.5%, well covered by FCF yields of 4.4% and 3.7% respectively, and are ploughing back investment into value-added innovation for customers, to drive future growth. For Auto Trader, recent product launches include Co-Driver (which automates the writing of vehicle adverts using the company’s comprehensive taxonomy data) and DealBuilder (enabling online reservations, part-exchange, finance and delivery to be booked online). Rightmove continues to develop its offering in mortgages, commercial property and rental services. A more general aim for Rightmove is to help agents and platform users digitalise the journey from accepted offer and completion in the UK, which currently takes an average of six months – one of the slowest in the world.
Clarkson
Shipbroker Clarkson is the global market leader – their ship broking business is approximately four times bigger than its next largest competitor. The first six months of the year were tough, as tariff uncertainty caused weakness in freight rates, which we viewed as an attractive entry point for a market leading business with interesting structural growth prospects, and a dividend yield and FCF yield of 3.2% and 4.7% respectively . The company also runs with - as Clarkson’s Chair puts it - a ‘war chest’ balance sheet – with over £200m of cash – and the dividend was recently increased for the 23rd consecutive year. Interim results were weak (organic revenue -4% and EPS -24%), though better than expected, as Clarkson continues to take market share and bring new teams of brokers on board. The company also continues to develop its market intelligence offering - a key part of its competitive advantage - which benefits hugely from the vast amount of data that flows through its network every day. Looking ahead, Clarkson’s market is cyclical but also underpinned by structural trends. Sea transportation remains essential for global economic activity, facilitating around 85% of all trade flows, and helping to marry global demand/supply mismatches in critical commodities. Additionally, structural shortages in ship supply - a legacy of the post-Global Financial Crisis decline in shipbuilding capacity - and tightening fuel efficiency regulations offer further support for freight rates. Clarkson sits in the middle of this global network, connecting a wide array of ship owners and users, and is well positioned to benefit from these trends.
Health care
The health care sector has been, as with consumer brands, an unloved area over the last two years, with recent US policy uncertainty and tariff risk not helping sentiment, and the sector is trading at multi-year lows. New holding Astrazeneca saw its PE multiple roughly halve between our exit in April 2023 and reinitiation of the holding in April 2025, with the company’s growth continuing at a good rate, but the share price falling back. First half organic revenue growth was +11% and EPS growth +17%, with some positive pipeline data too over recent weeks. Regarding tariff risk, the company has a well-invested US manufacturing footprint and continues to invest in the region - as CEO Pascal Soriot noted in a recent interview, it will not be long until the company is a net exporter of product from the US. GSK is set to grow earnings at a double-digit rate this year. The dividend yield of 4.6% is well supported by cash generation and the PE multiple is a lowly 8x. This doesn’t suggest much hope for the future, but we think the company’s efforts to develop its pipeline and progress on meeting its 2031 revenue target of more than £40bn are underappreciated. Medical devices company Smith & Nephew has also been unloved over recent years. It has been executing on a series of steps to drive better growth, improve supply chain robustness, and generate stronger levels of free cash flow. Recent interim results showed good progress, with organic growth of +5%, EPS growth of +14% and guidance reaffirmed for the year. The company currently trades on a dividend yield of 2.1%, and the recovery of FCF this year suggests a 5.2% FCF yield for the current year.
Elsewhere in the portfolio
Other results from larger holdings - not fitting into an obvious heading but worth a brief mention - include Howden Joinery and Integrafin.
Howden continues to take share in the UK kitchen market. The company’s organic revenue and EPS grew +1.7% and +6.5% in a market that was down over the first half, with volumes remaining at similar levels to the 2009 lows. The company continues to reinvest in its vertically integrated model, its product range and its depots, and is in a strong position to continue to take share. When volumes begin to recover, earnings could grow very significantly, with share gains likely to accelerate. Competitors have cut back on capacity so much in this downturn, that they would struggle to cope with a volume recovery. Howden currently offers a 2.6% dividend yield and a 4.1% FCF yield.
Integrafin provides a leading investment platform, Transact, to UK financial advisers, generating a high degree of recurring revenue. The company has a strong position in its niche (with more than 10% market share) and continues to gain share, with share of net inflows consistently above 15% over recent years. The company’s third quarter trading statement was strong, with funds under direction up +7.4%, and increased guidance for this year and next. As management put it, over the past year we have consistently taken over 20% market share of net inflows to the UK adviser platform market. We are delivering strong gross inflows of over £2bn each quarter, as we continue to win more business from competitors and as advisers are drawn to our best-in-class service and technology.
A full swing of the sentiment pendulum
I fully acknowledge that relative performance of the fund has been disappointing so far this year. At times like this it feels particularly important to share the under-the-bonnet trends we are seeing from a diverse range of underlying companies, and the healthy levels of cash generation they continue to produce - so a big thank you for your time if you have made it to the end of this more detailed update.
Investing in pieces of good quality businesses at sensible valuations is - at least on the face of it - ‘simple’, but it’s not always easy. One of the reasons I feel it works as a successful long-term strategy if you stick to it (which it does, if you interrogate long-term stock market history over a century or more), is because investors get bored of it from time-to-time and move on to other things, particularly when those other things are going up a lot.
I will finish with a quote from the first Evenlode investment view I wrote back in October 2009, when we launched the Evenlode Income strategy. History doesn’t repeat, but it sometimes rhymes, as the (overused!) saying goes. The recent risk-rally and the current market environment does remind me a little of that early period of the fund’s life. This is how I put it back then:
The initial rational re-pricing of risk has been gradually superseded by a fear on missing out on the excitement. As a result, we are seeing a very good opportunity in that segment of stocks that, if you were being unkind, you might refer to as boring. No problem for us here, the right kind of boring stocks have a habit of making a lot of money for investors as the years roll by, and all things being equal this is the section of the river we’d far prefer to cast our line into….in summary, this is not a get-rich-quick list of companies that we are looking at. However, businesses with sound fundamental economics have a good record of churning out healthy compound growth for shareholders down the years, often when nobody is looking.
I hope you enjoy the rest of the summer, and we look forward to continuing to update you over coming weeks on this challenging but fascinating economic and stock market environment.
Hugh, Chris M., Ben P., Charlotte, Leon and the Evenlode team
13 August 2025
Evenlode has developed a Glossary to assist investors to better understand commonly used terms.
Please note, these views represent the opinions of the Evenlode Team as of 13 August 2025 and do not constitute investment advice. Where opinions are expressed, they are based on current market conditions, they may differ from those of other investment professionals and are subject to change without notice. This document is not intended as a recommendation to invest in any particular asset class, security, or strategy. The information provided is for illustrative purposes only and should not be relied upon as a recommendation to buy or sell securities. For full information on fund risks and costs and charges, please refer to the Key Investor Information Documents, Annual & Interim Reports and the Prospectus, which are available on the Evenlode Investment Management website (https://evenlodeinvestment.com). Recent performance information is also shown on factsheets, also available on the website. Past performance is not a guide to future returns. The value of investments and any income will fluctuate (this may partly be the result of exchange rate fluctuations) and investors may not get back the full amount invested. Fund performance figures are shown inclusive of reinvested income and net of the ongoing charges and portfolio transaction costs unless otherwise stated. The figures do not reflect any entry charge paid by individual investors. Current forecasts provided for transparency purposes, are subject to change and are not guaranteed. Source: Evenlode Investment Management Limited, authorised and regulated by the Financial Conduct Authority, No. 767844.
Market data is from S&P CapIQ, Bloomberg and FE Analytics unless otherwise stated.
iSource: Financial Express: to 31 July 2025. GBP terms. Evenlode Income B Acc shares.
iiSource: Evenlode, Company Reports. Weighted average calculated for Evenlode Income portfolio. Revenue and profit numbers are organic (excluding impact of foreign exchange and mergers/ acquisitions). EPS is also quoted on an adjusted constant currency basis to give clearer picture of underlying profitability.
iiiFree Cash Flow (FCF) - A measure of how much cash a company can generate over and above normal operating expenses and capital expenditure. The more FCF a company has, the more it can allocate to dividend payments and growth opportunities. FCF yield is FCF per share divided by the current share price. A higher FCF Yield implies a company is generating more cash that could be paid out as dividends and to reinvest into growth of the business. The FCF Yield of a portfolio is the total FCF generated by the portfolio, divided by the market value of the companies in the portfolio.
ivSource: Evenlode, Visible Alpha. Dividend Yield for each portfolio company is calculated by dividing the dividend per share by the current share price.
vPrice/Earnings (P/E) Ratio - A measure of a company’s current market valuation compared to its earning potential, calculated by dividing a company’s share price by its EPS. EPS is calculated by dividing a company’s profit by the number of shares in issue.
viReturn on Capital Employed is calculated by dividing Operating Profit by Capital Employed (assets used to generate profits)
viiNetwork effects - Where the value of a product or service increases when the number of people using it increases.
viiiAd Valorem fees - charges calculated as a percentage of the value of a transaction.