Value as a Philosophy

First Eagle’s value-oriented investment philosophy is rooted in the belief that the greatest risk investors face is the permanent impairment of capital, which is caused by overpaying for assets. We seek to avoid this hazard through identifying and investing in businesses we believe possess scarce, durable assets that provide long-term operational advantages and are highly difficult to replicate.

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Value as a Philosophy

First Eagle’s value-oriented investment philosophy is rooted in the belief that the greatest risk investors face is the permanent impairment of capital, which is caused by overpaying for assets. We seek to avoid this hazard through identifying and investing in businesses we believe possess scarce, durable assets that provide long-term operational advantages and are highly difficult to replicate.

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First Eagle takes an atypical approach to identifying value. Rather than dogmatically limiting our investment universe to only stocks deemed cheap by some statistical measure, the Global Value team lets the character of each business dictate its potential appeal as an investment. By making the quantification of price conditional to our fundamental appraisal of an organization’s specific tangible and intangible attributes, “value” becomes a big tent rather than an artificial constraint.

Matt McLennan discusses how First Eagle prevents style drift and maintains a disciplined approach. We look for what we believe are compelling valuations for high-quality businesses with the potential for growth in intrinsic value.1

 

 

 

1“Intrinsic value” is based on the Global Value Team’s judgement of what a prudent and rational business buyer would pay in cash for all of a company in normal markets.