Philosophy & Process
Philosophy
We believe the global small-cap and mid-cap markets are inefficient.
For over two decades, Hood River has employed a process that utilizes rigorous proprietary, fundamental analysis that identifies information gaps between our estimates and market expectations. Over the long term, we believe this can deliver superior, risk-adjusted returns.
Process
1. Find the Best Businesses
We seek to invest in companies typically growing at above-market rates with strong cash flows, increasing market share, and excellent management teams.
2. Talk to People
The investment team initiates thousands of touchpoints every year with company management, suppliers, competitors, and customers to generate and corroborate our forecasts.
3. Compare & Contrast
We compare our fundamentally-driven estimates to Wall Street expectations. We refer to material differences between these two as a ‘research gap’, that we can exploit to achieve superior returns.
4. Pay the Right Price
At our core we are growth investors; however, we recognize the importance of valuations. Generally, high valuations increase downside risk and may indicate our estimates may already be incorporated in pricing.
