Motilal Oswal Report On Good-to-Great Companies

Investment Framework: Static & Dynamic Value

Identifying companies migrating from Good-to-Great

– In this report, we introduce our proprietary Static and Dynamic Value framework of investing and use the Good-to-Great theme to identify the top large capitalization investment opportunities within our coverage universe.

– Our studies indicate that combining our framework and the Good-to-Great theme has generated 1,500%+ outperformance over three years in Static Value stocks and ~500% outperformance over 10 years in Dynamic Value stocks.

The Framework: Static and Dynamic Value

Our Static and Dynamic Value framework of investing finds academic support from the residual income model and revolves around the central concept of Intrinsic Value (IV). While Static Value hinges upon deep discount to IV, Dynamic Value is driven by growth in IV.

Using a set of quantitative filters on our coverage universe that reflect the characteristics of static and dynamic value, we arrive at the shortlist of attractive stocks.

The theme: Good-to-Great

We adapt Jim Collins’ ‘Good-to-Great’ theme to Indian equities to identify businesses that have used the economic downturn over the last 2-3 years to transform themselves from ‘good’ to ‘great’. We believe these businesses could reap disproportionate benefits in an economic up-cycle.

We apply this theme to narrow down our shortlist to top attractive investment opportunities.

Motilal-Oswal-Good-Great-Companies-Report