Company examples

Actions speak louder than words, in my opinion. Saying I intend to invest in great businesses is one thing, doing it is quite another. The five companies below are all featured in the Quality Shares Portfolio. While they are very different, I believe each has the qualities I’m looking for in spades.

RELX (FTSE 100) – a data geek

How can a car insurer give you an accurate quote in an instant? The answer is data, and lots of it. RELX is a leading provider of such data – 20 of the world’s top 25 insurers rely on it. Many other professionals, from lawyers to academics, also depend on RELX’s data every day to make critical decisions. As the data revolution takes hold, RELX could be well placed to capitalise.

Why I like RELX

Roper Technologies (S&P 500) – a rare vintage

I see Roper like a fine wine collector that focuses only on the best vintages. But instead of wine, it acquires niche software and technology businesses, providing an environment where they can flourish. Over time, I expect Roper to use the cash flow from these businesses to add more high-quality companies to its collection.

Why I like Roper

Diploma (FTSE 100) – a niche industrial

Have you ever noticed those big Caterpillar machines on construction sites? They cost hundreds of thousands and if they break, work grinds to a halt. Diploma supplies components to repair those machines. It’s one small part of its business, patiently built up through two decades of shrewd acquisitions. Diploma focuses on delivering low-cost but critical products, with each acquisition further diversifying the portfolio and entrenching its niche market positions.

Why I like Diploma

Croda International (FTSE 100) – a chemicals company, with a twist

Think of a chemicals manufacturer and you probably picture large refineries, smoking chimneys, and the odd industrial spill. Croda is different. Its chemicals come in test tubes and go into skin creams and drug delivery systems. In fact, Croda’s chemicals played a key role in the Pfizer Covid-19 vaccine. I believe Croda’s best days are ahead, with its vaccine success potentially spawning a rich seam of opportunities.

Why I like Croda

Danaher Corporation (S&P 500) – the picks and shovels of biological therapies

In the California gold rush, it wasn’t the gold miners who made the most money. It was the companies supplying the picks and shovels. By providing the equipment to research and create biological drugs, Danaher has positioned itself as the picks and shovels provider to the medical science industry. Demand for these therapies is exploding, but picking winners isn’t easy. Danaher’s broad product portfolio means it could be well positioned to benefit, without bearing the risk of drug development.

Why I like Danaher

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