How Munro Partners finds sustainable growth stocks

Successful investing is unashamedly a game of few winners and many losers. It’s about zeroing in on individual companies that demonstrate an ability to grow profits consistently.

Equity investing isn’t about identifying the economic conditions but is about finding the big structural changes that are about to occur and the winners from these.

Pointing to the US market as an example, of the more than 25,000 companies that were listed in a 90-year period, the entire wealth of the market is concentrated among just 4% of this total.

And if you look at just the top 50 companies of that 4%, they make up almost 50% of the entire wealth of the US stock market over that period.

At Munro Partners, their job is to try and work out what's coming next. They do this by narrowing down a global universe of around 35,000 listed companies into a more manageable collection of around 1,000 names. This list is then sifted further into six areas where they believe there’s a greater likelihood of structural growth:

- Innovative health
- Climate
- Digital enterprise
- Emerging consumer
- Digital payments
- High-performance computing.

In the following video, Nick discusses a handful of companies from these areas that they believe have the right characteristics to achieve the structural growth they are looking for.
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