At Hueniken Asset Management, we employ in-depth, data-driven research aimed at investing in businesses that hold potential to generate private equity-like returns while not exposing investors to undue levels of risk.
1) We seek businesses with competitive advantage(s)
The competitive advantage(s) must be transparent, durable and verifiable.
2) The business must have a proven product or service
There must exist evidence of marketplace acceptance of the company’s product or service.
3) The business must be generating revenue
We have no interest in investing in business plans or concept stocks.
4) We seek businesses at a growth inflection point
This condition often forms the basis of an upward revaluation of the company in the future.
5) The addressable market must be large
We do not invest in companies whose revenue growth potential is limited.
6) The business model must be scalable
The ability of management is a key factor in assessing this criterion.
When we find such rare opportunities, we are careful not to overpay for a firm’s future growth and put significant capital to work at the time of initial investment. We continue to own the securities of such companies as long as our investment thesis holds. We are patient and disciplined. We typically hold a security for two to five years.
Our Guiding Principles:
Be a long-term investor:
Too much emphasis is placed on short-term momentum, to the detriment of long-term value.
Actively look for ideas:
Great investment ideas have to be found. They don’t find you.
Outperform by being different:
To outperform, one has to invest differently from the crowd. We run concentrated portfolios.
Recognize the limits of your understanding:
It is just as important to recognize what you don’t know as what you do.
Do your homework, know the facts and make decisions based on the facts.
Good card players don’t show their hands:
Confidentiality is critical for successful small company investing.
Check facts directly.