Adam Weiss and James Crichton of Scout Capital Management are scheduled as to present at the 7th Annual New York Value Investing Congress. In their December 2010 interview with Value Investor Insight (currently available as the sample issue HERE), they described the types of businesses in which they look to invest:
We’re looking for businesses with low capital intensity, the ability to generate high levels of free cash flow and a privileged business model that enables the company to produce excess capital. We want the financial and business models to be transparent. In terms of competitive dynamics, we want to understand the value of the company’s product or service to customers and the strength of its competitive moat. From an industry perspective, we ideally want to see long-term sustainable growth and secular tailwinds.
One of the quality businesses that meets their criteria for investment is Verisk Analytics (Nasdaq: VRSK). As the newsletter summarizes their thesis:
Operating “literally one of the highest-quality businesses we’ve seen,” says Adam Weiss, the company has the potential to increase revenue at 10-12% per year and free cash flow at a 20% clip. At what he considers a not unreasonable 20x the $2.40 in free cash flow per share he’s estimating for 2012, the shares would trade at $48.
Readers of Value Investing World are eligible for a $1,900 discount to attend the New York Value Investing Congress on October 17 & 18. To qualify for the discount, please use the link below and the discount code N11VIW4. The discount expires on July 29, 2011. Disclosure: Value Investing World receives a referral fee for registrations generated through the link.