Capital Preservation

Risk-Based Asset Allocation

Core Index Strategy

Satellite Active Strategy

Servant Financial will identify businesses with sustainable business models. These businesses typically share the following characteristics:
  • Consistently high and stable profit margins and profitability.
  • Above-average returns on equity (>12%).
  • Strong balance sheets with prudent use of leverage.
  • Ability to generate free cash flow (operating cash flow less dividends and capital expenditures). We seek to invest in a business whose future earnings and cash flows are predictable to a high degree of certainty. Companies with predictable earnings have good business economics and produce cash that can be reinvested or paid out to shareholders.
  • Defendable and superior market positions. We seek businesses whose product or service will be in constant and growing demand and avoid commodity-based firms, selling products where price is the single most important factor determining purchase. Superior businesses sell products and services where there is limited effective competition, either due to a patent or brand name or similar intangible that makes the product or service unique.
  • Above-average growth prospects.
  • Superior capital allocation. We seek businesses whose managements have proven they are able to employ retained earnings in new moneymaking ventures or for stock buybacks when they offer a greater return.
  • Sensible and consistent corporate strategy. We avoid business that have questionable social and environmental aspects or that frequently change corporate strategies.
  • Character, integrity and overall capability of management. We avoid businesses with managements with questionable reputations and/or ability.


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