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Sustensis

Research Centre for Business Sustainability

 

 

 

Sustensis Indices

 

Sustensis has been involved in Business Sustainability (meaning the long-term company’s growth and business survival) for nearly 20 years. A few years ago we needed to assess companies’ long-term competitiveness. We thought there would be specialist indices but none were available. That’s why we have developed our own. We now have two families of patent-pending indices for selecting equities for long-term investment, M&A and 10 other applications:

 

r Long-term Growth Value® (LGV) index, with 25 long-term growth productivity criteria (such as 5Y AVG turnover/employee ratio), primarily for long-term investors for quickly finding the intrinsic value and identifying undervalued companies

r Long-term Growth Potential® (LGP) index, primarily for the companies themselves to assess their long-term growth potential and company rating. It uses 245 criteria quantifiable intangibles (such as no. of patents), or long-term growth productivity indicators, combined into 15 categories e.g. Innovation, Quality, Brand, Strategy, Technology, Corporate Governance etc.

 

Both LGV and LGP indices, supported by our patent pending Intangibles Pricing Method®, are based on real economic growth of the target company and can be used to select companies growing for the long-term as investment targets to achieve:

 

r Lower than average risk

r Higher than average return

r Higher correlation between the index value and the long-term share value

 

Investment in these companies will usually be held from a few months to many years, depending on acceptable share price and index value spread. The essence of investment based on Sustensis indices is to pick up the “best relative improvers” rather than the top blue chip companies, effectively enabling investors “to become their own “Warren Buffets”.

 

A portfolio composed of best companies in each sector, using LGV index data for 2004-30/09/2010 outperformed S&P1200 index in every of 8 quarters in the most volatile period 01/10/2009-30/09/2010 on average by over 140% with the financial results correlated with the LGV index-predicted share price growth above S&P with the average accuracy of 70%.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The indices calculate the company’s true (intrinsic) share value, corresponding to its long-term growth competitiveness and productivity. We also rank companies’ long-term growth on the scale of 1 to 50 (over 5 grades with 10 steps – similar to S&P A, B,C rating), which allows a quick identification of the undervalued companies as potential targets for investments (e.g. corporate bonds).

 

LGV and LGP family of indices (with over 1,000 sub-indices) can support customized portfolio of most fund managers investing in equities. Currently, there is a choice to invest in about 3,000 companies with the turnover of over $100M. We can generate LGV a new portfolio, requested by funds, in a day. We can also provide automatically generated recommended investment decisions, upon request.

 

Especially good return with lower risk can be made in companies, which are less known. Their value is relatively low because of lack of non-financial information. Sustensis indices provide such information, reducing the investment risk and at the same time generating higher return.

 

 

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