Equity Investing

Covington manages global core portfolios for our clients with a blend of geographies and capitalizations.  Our process allows clients to participate across equity styles which tends to dampens volatility over time, and exposes a portfolio to a diverse range of opportunities.  Within this framework, Covington adds value through sector and theme rotation, while maintaining tax efficiency where appropriate.

We believe companies that possess the following attributes are well positioned to create value for shareholders through varying economic and market environments:

Business attributes

  • Essential products and services
  • Loyal customers
  • Leadership in an attractive industry
  • Enduring competitive advantages
  • Consistent track record

Management attributes

  • Strong operators with integrity
  • Superior capital allocators
  • Meaningful share ownership
  • Reasonable compensation structure

Financial attributes

  • Strong balance sheet and free cash flow
  • Enviable operating margins
  • High returns on capital

Our sell discipline considers excessive valuation, deteriorating fundamentals, relative attractiveness, and change in management.  Turnover is typically less than 30% per year.