Philosophy

Our bottom-up approach is unique to other growth managers in that we place as much emphasis on valuation and protection of capital as we do on the growth potential of a company.

Philosophy

Mar Vista invests in high quality growth businesses trading at discounts to fair value. Specifically, we look for companies with sustainable competitive advantages and abundant opportunities to grow and reinvest capital at high rates of return. We also seek management teams with a proven ability to allocate capital in ways that maximize shareholder value.

Our bottom-up approach is unique to other growth managers in that we place as much emphasis on valuation and protection of capital as we do on the growth potential of a company. We prefer businesses that can grow profits at high rates, but will not invest if the stock price already reflects these opportunities.

We value companies as private entities, discounting free cash flows, or economic value added, to determine what the business is worth. We then compare this number to the price the market is currently willing to pay. Our required margin of safety, or discount to fair value, varies depending on the stability and predictability of the business. The wider the range of potential outcomes, the higher the margin of safety we demand.

We sell an investment when the market price exceeds our estimate of fair value, the fundamentals fall short of our investment thesis, or when there are more attractive investment alternatives.

In our view, Mar Vista’s longer term investment horizon (3-5 years or more) creates a significant competitive advantage. Our willingness to look beyond the next several quarters to assess the true cash flow potential of a business creates numerous lower-risk investment opportunities. Often, what is perceived to be the maximum point of uncertainty is, in reality, the best entry point since the market has already priced in an overly pessimistic scenario.