By: Jeff Hyrich
Whenever I’m looking at a potential investment for the EdgePoint Portfolios, I’m always thinking of what’s special about the business or what advantage(s) it has that will allow for continued success in the future. Culture usually plays an important role but many times before the culture developed, the company or its founders were doing things differently from the prevailing wisdom of the times. For example, most airlines flying between two cities only use the biggest airport because that’s what everyone else does. Ryanair,i a previous EdgePoint holding, upended this practice by often flying into smaller, secondary airports, which are both cheaper and less crowded. The result was faster turnaround times, more flights per day and less time waiting to takeoff. Ryanair passes these savings back to customers by offering some of the lowest fares in the industry. Their planes fly fuller and they have some of the industry’s highest margins and returns on capital. Go figure.
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