A measure calculating how well an investment portfolio has outperformed a benchmark, usually a market index. In other words, it is the degree to which an investor has managed to “outperform” the market over a period of time. The alpha can be positive or negative, depending on how close it is to the market. Alpha therefore measures a manager’s ability to add value. The higher the alpha, the better the management.
It is a volatility measure. It describes the sensitivity of a portfolio or security to a market fluctuation. A beta greater than 1 means that the asset is more volatile, that the fluctuations are amplified in relation to market movements.
An investment strategy that consists of holding investments for the long term to maximize value creation and paying little attention to short-term market fluctuations.
Capital expenditures related to both tangible and intangible assets enabling the company to maintain or expand its production or service capacities.
Cash spent by a company to cover its overhead costs.
Refers to the cash equivalent that can be rapidly transformed in cash.
Clearing refers to the clearing procedure by which financial transactions are settled, i.e. the transfer of funds to the seller and securities to the buyer. A specialized third party organization called a clearing house often acts as an intermediary for the transaction.
A financial institution with the status of a bank where security holders deposit their stocks. The missions of the custodian are: the management of securities accounts, the administrative processing of settlement/delivery flows, the custody of assets, the management of securities transactions and finally the provision of information to clients.
Earnings Before Interest Taxes, Depreciation and Amortization ; is the operating profit of a company before subtracting interest, taxes, depreciation and amortization.
allows professionals, craftsmen, shopkeepers, liberal professions, farmers, company managers – employing at least one employee – to increase their income while reducing their charges and taxes. Their employees will be able to benefit from these same employee savings plans and the same tax advantages.
Earnings Per Share is calculated by dividing the profit earned by a company over a period by the common shares outstanding at the end of the period.
Investment securities that pay investors regular fixed interest or dividends until maturity. At maturity, investors are repaid the capital invested. Fixed income products can be assimilated to bonds or derivatives that can be issued by companies or government entities.
The cash generated by the operating activity after the investments necessary for the company to maintain or develop its capacities have been paid.
A contract in which two parties agree to buy or sell a specified quantity of an underlying asset (e.g., a stock or a stock index) at a pre-agreed maturity date and price. It anticipates future changes in an underlying asset and can therefore be used to hedge a portfolio against future market fluctuations.
This is the highest point a fund or account has reached. This term is often used in the context of fund managers’ compensation, which is based on performance. The principle of the High Water Mark is that it requires the manager to beat the highest net asset value before being able to charge performance fees.
A hedge fund management strategy that involves exploiting general equity market trends by buying or selling stocks short.
Mergers & Acquisitions, this refers to business combinations or situations where one company is acquired by another.
The maximum loss that can be observed between a high and a low point. The max drawdown is a simple measure to calculate and understand: it measures the worst possible loss within a given interval.
Enterprise value divided by sales. This is a financial ratio that compares the total value of the business to its sales and measures how much it would cost to buy the value of a business based on its sales.
Enterprise value divided by operating income. It is a financial ratio that compares the total value of the company to its operating income and measures how much it would cost to buy the value of a company based on that operating income.
Payments received upon pre-approval of a treatment by a regulatory agency, a step that occurs prior to marketing approval.
A discrepancy between the price given by the market on a stock and the real fundamental value of this company estimated by our analyses. This means that the stock market price is inappropriate at a given time compared to the intrinsic value of the asset.
The velocity of a stock’s trend, both up and down, over a given period of time.
Allows us to measure the excess return over a risk-free investment for 1% of risk taken; the risk being represented by the volatility. If the Sharpe ratio of a fund is 2, it means that 1% of volatility allowed to generate 2% of additional performance compared to a risk-free investment. The higher this ratio, the better the risk/return ratio.
An investment approach that relies on stock selection as opposed to sector or geographic allocation. Stock picking is based on the belief that stock selection contributes more to portfolio performance than asset allocation. Management therefore focuses on a company’s own qualities rather than the attractiveness of a sector or geographic area.
The tracking error represents the volatility of the relative performance of an investment vehicle compared to its benchmark. In concrete terms, the tracking error represents the difference between relative performances and their mean and makes it possible to assess the regularity of performances relative to their index. A low tracking error means that performance and risk-taking are close to those of the benchmark and vice versa.
Term used to define the upside potential of a stock after our analysis and valuation work.
valuation of a fund’s assets at a given moment. The valuation of our funds is done daily.
The volatility of a stock consists in evaluating the difference between its performance and its mean. The aim is to measure the regularity with which these performances have been obtained. Volatility is a measure of risk: the more volatile the fund, the greater the range of possible performances, whether positive or negative