In theory, defining resilience in the context of a listed company should be relatively straightforward: a high level of recurring revenues, a strong balance sheet and a high degree of free cash flows.
Yarra Capital Management portfolio manager Katie Hudson says investors need to be careful they are not overpaying for owning resilient companies that will survive an economic downturn. “With volatility in markets and uncertainty around the outlook, the risk is investors tend to overpay for that safety,” she adds.
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