This analysis delves into a strategic investment approach, prioritizing the acquisition of enduring businesses at advantageous valuations. The methodology involves a rigorous evaluation of each company's financial robustness and management quality. Noteworthy examples include Cavco, recognized for its substantial cash reserves and active share repurchase programs, and Skechers, a global leader in footwear, which was successfully acquired in late 2025, resulting in its divestiture from the investment portfolio.
Detailed Investment Commentary: Third Quarter 2025 Review
In the third quarter of 2025, our investment strategy continued to focus on identifying and investing in durable business franchises that demonstrate strong intrinsic value. Our 'business owner's approach' to investing guided us through meticulous investigations into the economic fundamentals and operational integrity of potential holdings. A prime example of our strategic selections was Cavco Industries. The company's prudent financial management, evidenced by its significant cash reserves and consistent share buyback initiatives, reinforced our confidence in its long-term viability and undervaluation in the market. Another significant position was Skechers, a prominent player that had firmly established itself as the third-largest footwear brand globally. Our investment in Skechers underscored our belief in its market leadership and growth potential. Ultimately, Skechers was successfully acquired in September 2025, validating our assessment of its intrinsic value and leading to the profitable exit of our 2.8% holding from the portfolio.
This quarter's performance underscores the effectiveness of a disciplined, value-oriented investment philosophy. By concentrating on businesses with strong foundations and clear pathways to value creation, we aim to deliver sustained returns. The successful acquisition of Skechers highlights the potential rewards of identifying and supporting companies that are not only financially sound but also possess significant market influence and growth prospects. It reinforces the importance of diligent fundamental research and a long-term perspective in navigating dynamic market conditions.