Our Approach and Process
Echo Street’s investment approach is predicated on our foundational belief that, over time, the price of a stock will track its growth in NAV. NAV is comprised of two components: a parameter describing earnings growth and a parameter describing quality.
Our investment process centers on covering durable companies that consistently grow NAV. We refer to most of these companies as GoodCo’s™ and have spent over a decade building out this coverage universe. The majority of our analysts’ workflow is focused on underwriting the NAVs of these companies as well as discovering new GoodCo’s™.
Our workflow is consistent and rigorous, and we pursue knowledge that builds on itself, year after year.
LONG-ONLY EQUITY STRATEGY
Echo Street’s long-only equity strategy seeks to own the most privileged GoodCo’s™ from our coverage universe. Privileged GoodCo’s combine durability with strong earnings growth and we believe these companies represent the market’s most attractive compounders.
The strategy incorporates a long-term investment horizon and portfolio turnover is intended to be low.
MARKET NEUTRAL EQUITY STRATEGY
The objective of Echo Street’s market neutral strategy is to generate attractive, uncorrelated returns by monetizing relative price/NAV distortions. Net exposure is minimal and the majority of idea generation is systematic.