We believe the keys to long-term growth and wealth creation come from focusing on innovation at the company level and inefficient market pricing stemming from investors’ behavioral biases. This leads us to focus on identifying emerging-growth companies, particularly smaller company stocks that offer the potential for better-than-expected revenue and earnings gains.
An Eye Toward Growth Starts With Early Recognition
We are a disciplined, bottom-up, active manager who searches global markets for small- and mid-cap equities with superior fundamentals, growth prospects, and valuation characteristics. Buying opportunities come from the early recognition of growth as a result of new products, innovative changes in technology, or dynamic marketing concepts.
Our research adds value because many of the companies we follow have limited Wall Street research coverage. As limited research availability creates pricing inefficiencies, our nonbureaucratic management structure allows our team to respond quickly to new opportunities.
A specialized focus allows for favorable comparative analysis of similar opportunities within our narrow market universe, helping to provide clarity in a search for undervalued issues. Specifically, our process seeks to identify companies exhibiting the potential to exceed analyst growth expectations at a time when their stock prices still trade at reasonable price/earnings growth (PEG) ratios.
Growth Cycle Awareness
We believe that investing in smaller companies at the inflection point of change can result in superior investment performance over long periods of time. The entrepreneurial spirit is alive and well at these companies. Many are nimble and uniquely address the needs of their customers with innovative new products and services.
Successful investing demands more than finding companies with promising growth prospects. We must also buy these stocks for our clients at prices that make sense. By paying careful attention to companies’ valuations in relation to expected earnings growth rates, we seek to purchase stocks when they still have considerable appreciation potential.