Q3 Earnings Season - Much Ado About Nothing?

What's really changed over the past quarter?

Hi fellow Tortoise!

Welcome to another bi-weekly webinar! In this episode, we’ll highlight:

• Q3 earnings season - much ado about nothing? We’ll briefly touch upon on our sector buckets (VMS serial acquirers, consumer defensive et cetera) and what to expect. We anticipate continued high volatility in individual stocks, which is why we avoid making pre-earnings adjustments to the portfolio. We cannot anticipate short-term momentum, but clearly, if the fundamentals of our companies have significantly shifted in recent months, then we’d be following the wrong strategy. Or at least, not the approach that our members have signed up for.

• How leases and inflation impact return on invested capital and modeling true shareholder value creation. It’s so important to debunk financials, and be reasonable with our growth expectations.

• Lastly, we’ll talk about Constellation Software’s Altera acquisition and how that one is performing in terms of both un-levered and levered IRR. Altera isn’t the only large acquisition for which some targeted leverage was used.

• Below, we’ve shed more light on our newest holding (to be bought tomorrow) when it comes to compensation. Given its stellar past performance, setting the right incentives helps retain talent, and solid execution should be rewarded, period.

The presentation can be watched below, including the slides and the transcript.