large cap growth · 2021. 1. 15. · peregrine large cap growth composite peregrine’s client...
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L A R G E C A P G R O W T HL A R G E C A P G R O W T H
Profile
Criteria
Team Continuity
Portfolio Characteristics Top 10 Holdings
Brian H. Donohue, CFA, 27 yearsAndrew T. Flis, CFA, 12 yearsGary E. Nussbaum, CFA, 32 years
• Founded in 1983
• Consistent application of our pure investment style and process
• Seasoned investment team
• Limited institutional client base
• Assets under management $1.4 billion
Weighted Avg. Cap. ($B) .................. $283.7Median Cap. ($B) ............................. $44.0P/E (forward 12) ............................ 41.4xCFROI ................................................22%Total Debt/Capital ............................24%Turnover (10 year annual avg.) ........22%Companies in the portfolio ................ 28
Amazon Com Inc.AlphabetAdobe Inc.Veeva SystemsFacebook Inc. Class AOkta Inc.Visa Inc.ServiceNow Inc.Trade Desk Inc. Class AVertex Pharmaceuticals Inc.
Identifying companies sustaining a minimum 12% secular free cash flow growth.Characteristics include:
11 High unit volume growth - the ultimate litmus test
- Recurring revenue streams - Network effects - Organic growth - Large addressable markets
22 Sustainable competitive advantages
33 Substantial ability and opportunity for reinvestment
Cultures and incentives for growth and innovation
Long Duration, High Earnings Growth
Second Quarter 2020
PhilosophyOver the long term, earnings growth is the primary driver of total shareholder returns. We manage your portfolio as a single diversified growth company producing an underlying portfolio free cash flow growth rate of at least 12% and translating that into strong secular absolute and relative returns.
®
COMBINED EXPERIENCE
71YEARS
Our objective is to translate HIGH PORTFOLIO FREE CASH FLOW GROWTH
intoCLIENT RETURNS
We manage the portfolio as if it were a single, diversified growth company.
Invest in businesses, not stocks, to fully participate in our holdings’ dynamic
free cash �ow growth with low turnover.
1
Duration and growth are preeminent.
Target 12% minimum free cash �ow growth for every holding to produce strong absolute as well as relative
long-term portfolio investment returns.
2
Opportunity for growth determines
decisions, not benchmark.
High conviction portfolio of 25 to 35 companies to
increase probability of achieving objective.
3
44
Commitment
Research & Decision-Making Flow
Long Duration, High Growth Offers Significant Opportunity
Peregrine Large Cap Growth Composite
Peregrine’s Client Service & Marketing professionals are dedicated to understanding your individual needs, assuring customized client service and developing a long-term, attentive relationship.
Stefanie M. Adams(612) 343-7660RuthAnn DeFrang(612) 343-7639
800 LaSalle Avenue - Suite 1850Minneapolis, Minnesota 55402(612) 343-7600(888) 343-7600www.peregrine.com
©2020 Peregrine Capital Management
An approximation of our time allocation
Periods ended June 30, 2020
Annualized
Second Quarter
Year-to-Date
One Year
Three Year
Five Year
Ten Year
TwentyYear
Since 1/1/1983
Peregrine Large Cap Growth Composite gross of fees (%) 34.1 25.7 37.5 28.4 23.9 20.8 7.6 13.2
Composite net of fees (%) 34.0 25.4 36.9 27.9 23.4 20.3 7.1 12.8
Russell 1000® Growth (%) 27.8 9.8 23.3 19.0 15.9 17.2 5.5 11.2
S&P 500 (%) 20.5 -3.1 7.5 10.7 10.7 14.0 5.9 11.3
The composite includes all fully discretionary portfolios invested in Peregrine’s Large Cap Growth strategy. Net performance includes the effect of advisory or performance fees, while gross performance does not. Both gross and net performance reflects the reinvestment of dividends and interest, and the deduction of brokerage or other commissions, and any other expenses that a client would have paid or actually paid, other than custodial fees. Performance results for the period 1/1/83 through 1/1/88 is for accounts managed by John Dale while he was employed by Peregrine’s former parent company and managed the same strategy. Mr. Dale retired on 6/30/15. Past performance is no guarantee of future results. As with any investment there is always potential for gains as well as the possibility of losses.
Dura
tion
of
Cash
Flo
ws
Free Cash Flow Growth
Long DurationLow Free Cash Flow Growth
Short DurationFree Cash Flow Growth
Short DurationFree Cash Flow Growth
LONG Duration
HIGHFree Cash Flow
Growth
THEINITIAL
UNIVERSE
U.S. & Foreign Companies
> $1B1,200–1,400
80% will not meetour criteria
ResearchCandidates
200–300 companies10–30 new companies
per year
15%
ViableCandidates
110–130 companies5–10% annual
turnover
The PeregrinePortfolio
25–35 stocks10–30% annual
turnover
35%
45%
Our Bench
5–10 Companies
Ongoing analysis ofcurrent portfolio
5%