International economies generate approximately 85% of global economic output and it is our observation that successful companies display key similarities regardless of their country of domicile. MCM’s International Equity Strategy seeks to invest in future foreign market leaders as well as established companies that are attractively valued.
The International strategy provides a more thorough diversification by owning companies that are domiciled outside of the United States. We apply the same rigorous criteria used in our US- based strategies to identify market leading companies that are better positioned than their US rivals. We look to invest in geopolitically stable countries with advanced accounting rules and a strong history of corporate governance. The International Equity Strategy employs a combination of global macroeconomic analysis and bottom-up stock selection. We start with a universe of several thousand companies that trade in the US equity markets either through direct listings or American Depositary Receipts (ADRs). This list is sorted down to a manageable number of investment alternatives through a rigorous series of proprietary quantitative screens that include earnings growth, cash flow, leverage and relative valuation metrics. The International strategy has a mix of both growth and value-oriented investments representing numerous countries across North America, Europe, Asia, Africa, Oceania, Latin America and South America. Most candidates will be larger than $500 million in market capitalization.
We invest in all market cap sizes as this allows us to take advantage of inefficiencies across the
full market. Given our high convictions, we typically run a concentrated portfolio that is more
heavily weighted to those companies identified as having larger upside.
We complement our intensive use of fundamental analysis by implementing technical analysis to
optimize our entry and exit points. Because market conditions are constantly changing and
companies will fall in and out of favor, we monitor holdings on a daily basis in effort to preempt
any weakness in the portfolio.