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Profiting from small brands with big reach

Profiting from small brands with big reach

Packed the car and readying to take a re-opening road trip? Enjoyed a responsible G&T during lockdown?  If you have, you may be familiar with some of the brands I am about to discuss.  What you may not know is that these businesses, whose products you may already be using, are listed global small caps. You may also like to hear they’re owned in the Polen Capital Global Small and Mid Cap Fund.

Warren Buffett famously defined the job of an investor thus; “Your goal as an investor should be simply to purchase, at a rational price, a part interest in an easily understood business whose earnings are virtually certain to be materially higher, five, ten, and twenty years from now. Over time, you will find only a few companies that meet those standards -so when you see one that qualifies, you should buy a meaningful amount of stock.”


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Roger is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

Why every investor should read Roger’s book VALUE.ABLE


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  1. I’ve been reading Value Able and taking note of the main theme “Return on Equity” then researching a few Companies only to come up with one{ MFG} which looks to score above 40 for some years, but note the share price graph is continually heading south. Is this rare where the return looks high but a stock is unloved and treated severely by the market.

    • Hi Jim, Thanks for reading Value.Able. You might recall it is important to understand what is driving the high return on equity. Remember the section describing competitive advantages. It helps to be able to identify the source of the high ROE because only then you’ll know whether it is sustainable. Funds management businesses tend to generate high Returns on Equity because they are very ‘asset light’. They have a few photocopiers and some of the fancier firms have a few works of art. But that’s about it. So ROE tends to be high. But the earnings are driven by the underlying fund performance, which in turn generates fund flows. If the manager outperforms, funds flow in. if not, funds flow out. Consequently fund management company shares tend to be levered to their relative performance. I hope that helps.

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