Additional Thoughts on Idiosyncratic Companies

8 May 2019 | by Todd Wenning, CFA

In late April, I wrote another article for British investing publication, Investors Chronicle. This time around, I focused on what we call idiosyncratic companies – businesses that don’t compare well to others and are hard to categorize.

We love these sort of companies because they are often misunderstood and/or misvalued by the market. While we at Ensemble value companies based on expected cash flows, growth, and returns on invested capital, many other market participants rely on rules of thumb or relative valuation to “price” companies. These shorthand approaches have their place, but are less useful when a company has a differentiated business model.

In the article, I highlight two of our current holdings that we consider to be idiosyncratic: Ferrari and First Republic. We believe both of these companies are sector hybrids of sorts – Ferrari is part consumer luxury and part automotive company; First Republic is part high-end consumer services and part bank.

Please enjoy the article and, as always, feel free to CONTACT US with questions and comments.


As of the date of the post, clients invested in Ensemble Capital Management’s core equity strategy own shares of Ferrari (RACE) and First Republic (FRC). These companies represent only a percentage of the full strategy. As a result of client-specific circumstances, individual clients may hold positions that are not part of Ensemble Capital’s core equity strategy. Ensemble is a fully discretionary advisor and may exit a portfolio position at any time without notice, in its own discretion.

For more information about positions owned by Ensemble Capital on behalf of clients as well as additional disclosure information related to this post, please CLICK HERE.

While we do not accept public comments on this blog for compliance reasons, we encourage readers to contact us with their thoughts.

Past performance is no guarantee of future results. All investments in securities carry risks, including the risk of losing one’s entire investment. The opinions expressed within this blog post are as of the date of publication and are provided for informational purposes only. Content will not be updated after publication and should not be considered current after the publication date. All opinions are subject to change without notice and due to changes in the market or economic conditions may not necessarily come to pass. Nothing contained herein should be construed as a comprehensive statement of the matters discussed, considered investment, financial, legal, or tax advice, or a recommendation to buy or sell any securities, and no investment decision should be made based solely on any information provided herein. Links to third party content are included for convenience only, we do not endorse, sponsor, or recommend any of the third parties or their websites and do not guarantee the adequacy of information contained within their websites. Please follow the link above for additional disclosure information.