ARGA’s investment process implements our valuation-based philosophy and approach in a step-by-step manner that is replicated by our analysts across the world. Key to the process are:
- Quantitative screening – Our process logically and systematically screens for investment opportunities. To narrow the large and growing universe of over 5,000 global stocks, we run quantitative screens based on key value metrics. Our process validates initial findings and focuses research on the most promising valuation candidates.
- Detailed company forecasts – Our DDM-based intrinsic valuations require detailed company analysis. Studying company and industry fundamental data, analysts build detailed models assessing drivers, risks and growth. They also assess quality while discussing business and ESG issues with company management.
- Consistent valuation comparisons – Our process compares valuations across companies, industries and geographies. That requires consistent industry and accounting assumptions. So analysts standardize global accounting variables and industry frameworks. Only then can we meaningfully compare intrinsic valuations to identify stocks with greatest potential.
ARGA is committed to maximizing client returns through responsible investing. We believe ESG issues create risks and opportunities for the companies in which we invest. ESG is integrated into our process discipline and well-documented responsible investing policy. A signatory of the United Nations Principles for Responsible Investment (UNPRI), ARGA integrates ESG considerations across all investment stages before and after ownership, at both company and portfolio levels. ARGA’s global analysts play a key role, analyzing data behind the ESG scoring and actively engaging with company management. Analysts flag ESG matters in industry and company research, quantify ESG impacts in base and stress case forecasts, and reflect ESG in DDM-based valuations of upside/downside. By compressing the universe of attractively-valued stocks, ESG deepens our commitment to value.