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.
