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Strategy
The investment philosophy of Alzaid Financial Services is based on two simple principles; growth and value. We have a comprehensive approach to each objective.
Value
We believe a great way to preserve and enhance you assets would be to purchase a good business at a good price, our approach:
- Understand the business
- Understand the business model of management and their philosophy
- Recognize key components and characteristics of the business that creates intrinsic value
- Last and most important, what price is reasonable to pay for the business
In our investment recommendation we believe a rational business person wins. That individual will arbitrage and exploit the differential that is created between a stock market valuation and main street value because he takes ownership in his investment.
Value investing should be approach with a time horizon between two to three years in which time we believe that the greatest opportunities exist. However, the market volatility creates windows of opportunity from time to time. Unfortunately, most investors become fearful when they should be greedy and greedy when they should be fearful this reason alone is why you can find a good business at a good price. Ideally, we would like to find a business we never have to sell but we must remember the pendulum swings both ways and when the market places excessive valuation on company’s future earning in that case we look to sell.
Growth
The approach we use to inspire our recommendation to find potential growth companies there are several key ingredients.
- Current earnings: per share should be up and in many cases accelerating in recent quarters. Quarterly sales should be up or accelerating over prior quarters.
- Annual earnings should be up in each of the last three years.
- A company should have a new product or service that’s fueling earning growth. The stock should be emerging from a proper chart pattern and about to make a new high in price.
- Supply and demand shares outstanding can be large or small, but trading volume should be big as the stock price increases.
- Leading stocks in a leading industry.
- Institutional sponsorship should be increasing invest in stocks showing increasing ownership by mutual funds in recent quarters.
- The market indexes should be in a confirmed up trend since three out of four stocks follow the market’s overall trend.
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