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A company with strong financials is crucial. However, a company with strong leadership and management is equally as critical to the long term growth of a company.
When investors look for a company, the quantitative aspect is usually sought-after (ie. profit growth, cash flow, debt, etc) as the primary focus. However the qualitative (company leadership and management) nature of the company should also be taken into consideration. Qualitative assets are usually harder to detect as they are not quantifiable but numbers and figures.
Examples of successful companies with strong qualitative are like META (previously Facebook).
Meta grew as it holds appeal to the public and has been smart about acquiring businesses and recruiting/retaining talents. The CEO’s efforts (Mark Zuckerberg) also grin up near-term revenue prospects with its push into TV-like contents.
Presently, we take a look at a defensive healthcare company (RGC) Regencell Bioscience Ltd. A company focusing on using Traditional Chinese Medicine to treat ADHD (Attention Deficit Hyperactivity Disorder) and ASD (Autism Spectrum Disorders), and infectious diseases affecting people’s immune system such as COVID.
Since listing, the company CEO has purchased over $5 MIL of ordinary shares and has yet to sold any as of today. This qualitative aspect of the company displays the company and managements confidence and conviction about the company’s direction and future.
Moreover, the CEO will continue to deployed personnel funds buying back shares all against the market shorters and sellers.
The company has a prominent investment backer, Samuel Chen, who had a significant position in ZOOM (8.8% holding) post-IPO and Zoom’s market capitalization peaked at US$161 billion on 19 October 2020.
Investors should always remember to look into the qualitative face of the company, as it does play a part in identifying the strength of the company.