By James Langton
(April 19 – 17:30 ET) – The management discussion from Sceptre Investment Counsel Ltd. reads a lot like a confessional. It was a tough year at the firm. Now it is changing direction. The firm admits that it missed the tech-led rallies that boosted the Toronto Stock Exchange.
“We are reorganizing our investment management processes to incorporate the effect of technological changes into our analysis of all companies, and we are comparing companies in similar industries on a global basis. As a result of this changing dynamic, we are reorganizing our research efforts with the primary focus on global industry rather than our historical geographic approach,” says Sceptre.
“We have broadened our investment models to consider the possibility that the stream of earnings from companies leading this revolution is likely to persist longer, and at a higher growth rate, than was previously considered possible.” It will now look for companies whose valuations make sense in the current environment, and may steer clear of companies that look historically cheap if they are not responding to the Internet revolution. It says it is now focusing on “companies with strong competitive positions in growing markets”.
The firm has reorganized to deal with this new process. “We have separated research from the process of constructing portfolios, assigning specific analysts to key industry segments, beginning with technology, financial services and health care.”
“This has been a very difficult period for Sceptre. We now must endure the lag time between initiating change and improved performance results,” says Sceptre.