In-House Research

Qube is one of the rare wealth management firms that employs a dedicated in-house research team of equity analysts. The team examines companies according to our unique standards and methodology to locate undervaluation. Our analysts pride themselves on recognizing what other investors do not yet see.

Watch our recurring series, Tales from the Research Centre, to explore examples of our team’s hard work.

Tune in every Monday from September 26 to October 31 for a new video!

Developing the Team

 

We hire third and fourth year Finance students from various post-secondary institutions. Our 2022 analyst program consisted of seven students—the largest research investment in Qube history.

Our in-house research department is led by Portfolio Manager Patrick Choi, who has been with Qube for over eight years. Patrick continually guides the analysts in their research. Additionally, each student is assigned a mentor to whom they can look for advice.

Incoming students also undertake a 13-week bootcamp that familiarizes them with Qube’s values and investing practices. Our research program closely follows the methodology taught in the CFA (Chartered Financial Analyst) program.

 

The garage which serves as our research centre. A single storey building stands surrounded by trees.

In past years, the analysts worked out of the garage across Qube’s courtyard—a locale they’ve nicknamed the Research Centre. With the garage due for demolition in Winter 2022 and a fresh, new workplace to be built in its stead, we expect the analysts will be further inspired to track down more undervalued companies.

The Research Process

 

Below is a simple version of a complex process that includes many discussions between analyst and portfolio manager. More accurately, our portfolio managers check in with our analysts at many points between company selection and Steering Committee pitch.

A flowcvhart outlining the research process: 3 phases of research alternating with reviews from our portfolio managers, all leading to a pitch to our steering committee.

Formation of the Universe

 

Our research universe consists of roughly 250 companies. This pool of companies is formed from thoughtfully crafted metrics that help us navigate the endless possibility of options. Some of these metrics include:

    • Shares Outstanding
    • Dividend Yield
    • Market Cap
    • Return on Assets
    • Gross Margins

When market conditions dictate, we may look beyond the universe. Our filter generally provides us with companies that are on the safer and more conservative end. Due to the investment environment, the Steering Committee might want to deviate from these types of companies, and this is where the out-of-universe picks come in. This occasional change in protocol is only possible due to our strong confidence in our analysts.

By allowing our analysts the discretion to choose a company to research, we not only increase their engagement, but potentially provide Qube with investment opportunities more relevant to the current market condition.

Sometimes our portfolio managers will direct the analysts toward a specific company—again, based on the investment environment.

Curious about our returns?

Steering Committee

 

Our Steering Committee is comprised of our four portfolio managers. Committee members listen to the analyst’s pitch (which can last anywhere from 30 minutes to an hour) in which the analyst reveals their rating for the company. Companies are rated on a scale from 1 to 5.

To support their rating, the analyst outlines the crucial indicators that lead them to believe the company is undervalued.

After listening to the pitch and reading over the corresponding Phase 3 report, the committee discusses the company, keeping in mind the wider impact on portfolio’s diversity. Then, the committee votes on whether Qube will buy shares in the company or not.

Not every company that gets pitched the Steering Committee gets bought. In the past, the Steering Committee has decided against buying due to a company’s illiquidity, for example. A different company was not purchased because its lack of upside relative to similar holdings. In the end, some companies simply don’t work in the context of our current portfolio. 

Our research analysts must rate companies on a scale from 1 to 5.

We have been exploring research narratives in Stock Spotlights as part of our Qub[Ed] series. Launched in April 2022, Qub[Ed] is a collection of articles designed to make complex financial topics more accessible.

 

Read our Stock Spotlights.

WE MAKE IT SIMPLE TO PLAN FOR THE FUTURE.

Talk to our team about how our assertive financial planning can make your vision a reality.

WE MAKE IT SIMPLE TO PLAN FOR THE FUTURE.

Talk to our team about how our assertive financial planning can make your vision a reality.