The word ‘value’ has many connotations for investors. Some define it statistically: as a stock with a low price-to-book ratio, or a low price-to-earnings multiple. But the portfolio management team at Vancouver-based PenderFund Capital Management has a different approach.
They think about value in the context of getting more intrinsic value out of an investment than is being paid to acquire it.
“Nobody knows what the future holds, so you have to have some kind of sensible estimate of what the future holds for the company, which often includes some kind of estimate for growth,” said Felix Narhi, PenderFund’s chief investment officer. “Then you want to pay a price that’s fair to less than intrinsic value, otherwise you don’t beat the market.”
Narhi is portfolio manager of the Pender U.S. All Cap Equity Fund and the Pender Strategic Growth and Income Fund, as well as co-manager of the flagship Pender Value Fund.