Find the Best Businesses
We typically look for businesses growing 15%+, a market capitalization of less than $5 billion, superior products, strong cash flow, increasing market share in a growing industry, and excellent management teams.
Talk to People
We talk to a company’s management team, their competitors, suppliers, customers, other industry contacts, and sell-side analysts to put together a bottom-up, fundamental mosaic for a potential investment.
Compare and Contrast
After establishing our own fundamental outlook for a stock, we compare it to sell-side models and market expectations. We must have a variant perception to capitalize on sell-side errors or conservatism.
Pay the Right Price
Our price target is driven by our proprietary fundamental forecast. Before investing, we evaluate the company’s valuation versus its own history, its industry, and the market overall.
We add value through stock selection over time, not through sector weights. We control risk by limiting position sizes, controlling economic factor exposure, monitoring liquidity, and giving larger weightings to our highest conviction ideas.
Stocks are sold when the risk/reward is compromised. If fundamentals deteriorate or a stock reaches our price target, we aggressively sell positions.