The Setup
Our target entry points are structured primarily on a valuation basis relative to historical cash flow multiples adjusted for the unique aspects of the current environment.
Quantitatively, the goal is ascertaining our own internal cash flow projections then obtaining the stock in bottom 25% of historical valuation ranges based on that metric or better.
Qualitatively, we are constantly reviewing management's activities, alignment of interest with shareholders, and other key factors.
For context, most of the energy stocks in our Crisis portfolio were obtained in the bottom 1-3% historical valuations. Picking