Turtle Creek Asset Management Inc.

Our investment process starts by choosing the right companies. The single most important decision we make is which of the companies among the thousands of public companies deserve our ongoing time and attention. We strive to select good companies – sound businesses with strong management that drive their intrinsic value higher over time, even in difficult periods such as the credit crisis of 2007/2008. During this crisis, many companies went bankrupt and many more were forced to issue equity at very low prices. In contrast, we owned companies that had (and continue to have) strong balance sheets and that, in many circumstances, were able to take advantage of the financial crisis to build long term value, either through reinvesting in their businesses or by making strategic acquisitions.

Get to know the companies extremely well
After choosing the right companies on which to focus, we spend considerable time and effort formulating and maintaining a view of each company’s value. Our background, skill-set, and approach – spending our time on the right things – differentiate us from other investment managers. We enjoy the long and hard process of really understanding a company. We believe that our discipline and the depth of our analysis is rare.

Build and maintain an optimal portfolio
Having spent the time to understand each of our company’s value, we then construct an optimal portfolio. Simplistically, our optimal portfolio is diversified over approximately 25 companies in largely un-related industries with the size of each holding determined by many factors, the most important being how attractively priced it is. Changes to our portfolio over time are primarily driven by our response to changes in traded prices – the cheaper a company gets the more of it we own, the more expensive a company gets, the less we own.

Source: Turtle Creek Asset Management Inc.