THE INVESTMENT PROCESS

We believe investors should view investing as owning companies rather than owning stocks. Equally, we believe investors should know what is in their portfolio and why they own it. At Nepsis, we identify and own high-quality, undervalued companies based on in-depth analysis and research of company fundamentals. We also focus our investments within select, growing sectors, with a bias towards dividend-producing companies.

Just as we look to invest in individual quality companies, we also invest in you and our relationship. Nepsis™, Inc. accounts can be structured as a Separately Managed Account, providing you with a portfolio constructed to your unique needs and risk tolerance.

Our portfolios are comprised of 25-35 high-quality companies, ideal for proper diversification, without over-diversification. We do not allocate more than 5% of your original capital to any single company. You always have the ability to make adjustments to your portfolio and are always kept informed of what businesses you own and the reasons for owning them.

 


PRE-PURCHASE ANALYSIS

Experience and dedication to industry knowledge drives our approach to pre-purchase analysis of potential growth sectors and companies of interest. We closely examine the companies we are interested in through bottom-up analysis, assessing the fundamentals, determining those with the greatest potential value and looking at the growth potential of the overall marketplace or sector.

Dividends make a difference. Companies that pay a dividend offer the advantage of a greater potential return through reinvesting in the portfolio. Dividends are an indicator of a company’s financial health and can account for a significant portion of investment gains. The book (Triumph of the Optimists: 101 Years of Global Investment Returns, Princeton University Press [2002]) analyzed equity returns from capital gains and dividends between 1900 and 2000. The findings showed that market-oriented portfolios with dividends reinvested would have returned nearly 85 times the wealth of the same portfolio relying solely on capital gains.

 


POST-PURCHASE ASSESSMENT

Once we buy into a company, we continue to purchase through Strategic Cost Averaging™, provided the company continues to comply with our original selection criteria. Once a company meets our top-threshold price or no longer meets its original criteria, we exit our position and pursue other investment opportunities with greater growth potential.

 


Strategic Cost Averaging

STRATEGIC COST AVERAGING™

As many of our clients know, we are very active in the management of client portfolios. This active management includes the continual buying and selling of a small amount of shares in one’s portfolio – we call this Strategic Cost Averaging™ (SCA).

Our SCA process is something we believe is very unique and important to our portfolio management strategy. It allows complete flexibility in the management of your portfolio. ThIs flexibility is extremely important to the long-term success of investing. SCA provides us the ability to be continually investing in great businesses over time while simultaneously providing us flexibility to sell a portion of a business under our Sell Discipline.

 


SELL DISCIPLINE

A portfolio has a lot of moving parts. Every position in our portfolios is owned for a specific reason. Equally, when positions or companies we own are sold, it is also foe specific reasons. Due to the way our portfolios are structured, there is not any one position that will make or break a portfolio and its long-term performance. We continuously monitor markets and valuations of our current companies, as well as new opportunities that are available.

 

We have four sell disciplines that we adhere to in our investment process:

  • Selling a company when the long-term fundamentals are in jeopardy or have changed.
  • Selling a part of a position to lock in profits to raise cash for other opportunities or cash needs.
  • Selling a weaker company in favor of a stronger, less expensive company. This happens most frequently during market corrections or corrections within a sector or sectors.  
  • Selling positions to take a loss to offset future gains. This is called Tax-Loss Harvesting.

 


  > DISCOVER MORE… VISIT OUR WEBSITE  

 

Investing With Clarity™ Blog

Visit the Nepsis Blog by Mark Pearson, Founder & CIO… It's All About Clarity™

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News and Quarterly Updates

Q1 2018 Report

Nepsis has released its 1st Quarter Report accompanied by a new video series. View »


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Nepsis has released its 2nd Quarter Report accompanied by a new video series. View »


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Nepsis has released its 1st Quarter Report accompanied by a new video series. View »


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