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Investment Process
As growth investors, we constantly search for emerging long term investable themes and the unrecognized leaders most likely to benefit from the development of those themes. Every investment idea is subjected to a broad-reaching fundamental analysis to determine a realistic range of return on investment under different scenarios. We find that, at a minimum, the better investment ideas carry common “G.I.V.E.” characteristics:
- Great management Gaining share in a Growth market. Well run companies that understand their market opportunity and are aggressively working to distance themselves from their competition within their industry niche
- Innovation leading to Inflection. Companies creatively addressing an emerging unmet market need…and finding those companies before the broad investment community recognizes the ultimate cash flow generation potential
- Valuation advantage with Visibility and Viability. Even the most efficient markets produce periodic “buying opportunities” in equities in which valuation temporarily becomes favorably delinked to a company’s growth, profitability balance sheet strength and cash flow generation prospects
- Event Catalysts identified Early. Timing an investment to best capitalize on upcoming favorable company-specific, industry or global events within the context of investment community expectations and evolving competitive dynamics
We also employ technical analysis to determine optimal investment timing on each position within the portfolio. Buy and sell actions are taken only after careful study of a cross-section of “over-bought/over-sold” oscillators, money flow volume, trading divergence crossover points and a host of second-derivative rate of change indicators. The decision to periodically hedge portions of the portfolio or to initiate a compelling short position involves a similar technical and fundamental analysis, although the trade is likely to be shorter in duration.
