Growth at a Fair Price Model
Windmill Capital
High growth companies that are available at reasonable valuations
3Y CAGR
11.36%
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Daily Change
Today's change in this smallcase is
7Y CAGR
CAGR (Compounded Annual Growth Rate) indicates the average yearly return generated by a smallcase from the date of launch. Only live data is considered to calculate the CAGR. Thus, this smallcase has given returns on an average every year since Apr 4, 2016
High Volatility
Stock prices move up and down on a daily basis, resulting in fluctuating investment value. High volatility indicates high fluctuation is expected in the investment made in this smallcase
About the smallcase
Growth companies experiencing positive earnings growth and having a reasonable valuations, while growing at a rate faster than the overall economy
- Growth companies often reinvest their earnings into numerous opportunities instead of paying dividends. Their rapid business expansion and escalating earnings typically result in higher valuations.
- However, prudent investment dictates a balanced approach to pricing. Regardless of a company's excellence, it's crucial to avoid overpaying. This is especially true for growth companies, where keeping valuations in check is important.
- While these companies present attractive investment prospects, their often steep valuations necessitate a careful evaluation to determine if they are priced appropriately for their growth potential and financial health.
- This smallcase is a carefully curated selection of High-Growth Companies available at reasonable valuations.
- Additionally, companies that demonstrate a higher ROCE, alongside maintaining healthy profit margins are selected.
You can access the asset allocation version of this smallcase with better risk-adjusted returns here
Methodology
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Methodology
universe
All publicly traded companies on the National Stock Exchange of India, covering approximately 90% market capitalization, are included in the universe
research
- At Windmill Capital, our team cultivates investment philosophies rooted in cutting-edge academic research and insightful white papers. These resources lay the groundwork for a comprehensive understanding of market dynamics, risk management, and optimal return strategies. Subsequently, our sophisticated testing mechanisms allow us to create portfolios that are both theoretically robust and empirically validated
- To further refine our models, we harness advanced mathematical, statistical, and analytical methods. These may include optimization algorithms that balance risk and return, as well as statistical analyses to uncover factor regimes and correlations. Such techniques enhance our stock selection process and portfolio weighting decisions, ensuring precision and effectiveness
- Growth at a Fair Price Model smallcase predominantly selects stocks/ETFs that are high growth businesses available at reasonable valuations
stockScreening
- Stocks/ETFs qualifying the above mentioned research criteria are selected for further analysis
- Proprietary liquidity filters are applied to remove ill-liquid stocks/ETFs from this list
- A special check is further applied to remove stocks, where a significant part of the promoter holdings are pledged
- Stocks/ETFs are further removed on the basis of red flags such as their presence in ASM/GSM list of the exchanges, deep negative news or sentiment etc
weighting
This final list of selected stocks making part of the portfolio is equally weighted
rebalance
This smallcase has a quarterly rebalance schedule. Once every quarter, the research team reviews this smallcase and realign the weights with the selected asset allocation strategy for the next quarter
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