Quality-Value Investing

Marc Melendez, CFA

Emerging Market Small and Mid Cap Equities

Reperio Capital

Reperio Capital Research was founded in 2013 with the goal of better serving the investment community with in-depth, high quality, value oriented research.

Reperio means to discover in latin. Using value investing principles, we aim to discover a minimum of 12 investment opportunities per year within the Emerging Markets Small and Mid Cap universe.

We take a business owners perspective with a long term investment horizon. We conduct bottom up, fundamental research. We focus on downside risks and require a significant margin of safety in any investment to prevent the permanent loss of capital. All factors differentiating our research from the short term, trading focus of traditional research providers.

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/910" target="_blank" data-smartkarma-citation="entities:910:1">Dongfeng Motor Grp Co Ltd H (489 HK)</a> is the second largest automobile producer in China. Since 2013, it grew combined sales at subsidiaries and joint ventures by 11.0% per year and combined operating profit by 6.0% per year, while generating an average return on invested capital of 24.1%. The company has a net cash position on its balance sheet and at each of its joint ventures. Despite the company’s continued growth, strong profitability, and healthy financial position, Dongfeng trades at a price to book ratio of 0.50 times. The upside to the sum of the parts base case valuation is 196% and the upside to the bear case is 118%. </p>

Dongfeng Motor Grp Co Ltd H (489 HK) is the second largest automobile producer in China. Since 2013, it grew combined sales at subsidiaries and joint ventures by 11.0% per year and combined operating profit by 6.0% per year, while generating an average return on invested capital of 24.1%. The company has a net cash position on its balance sheet and at each of its joint ventures. Despite the company’s continued growth, strong profitability, and healthy financial position, Dongfeng trades at a price to book ratio of 0.50 times. The upside to the sum of the parts base case valuation is 196% and the upside to the bear case is 118%. 

Dongfeng Motor Group (489:HK)- Too Cheap to Ignore