CASTX::Class C Shares
Equities purchased at prices substantially less than their intrinsic worth may limit the effects of drawdowns and may also appreciate substantially once the market recognizes the company’s economic value.
We typically will initiate or add to a position when the company’s market price trades at a discount to our estimate of intrinsic value. We estimate intrinsic value by studying and analyzing information from a variety of sources including financial statements, speaking with corporate management, analyzing regulatory information, or reading trade publications, as well as other industry and corporate journals.
We may assess the company’s liquidation value based on the current economic worth of assets and liabilities or we may determine the company’s ongoing value based on its ability to generate free cash flow after required capital expenditures and working capital needs. We calculate the present value of the projected free cash flows plus a terminal value, using a conservative discount rate. Our analysis should represent the price that rational, independent buyers and sellers would negotiate in a private transaction.