Our investment philosophy posits that there are inefficiencies in the small and mid-cap universes, and by implementing a thoughtful and rigorous research approach we have the opportunity to achieve outsized returns. We believe that by utilizing a fundamental, bottom-up investment approach, we can build portfolios where each company's upside return potential is at least twice that of its downside risk, according to our valuation models. We do this by implementing a process that searches for companies who are:
(1) currently at the low end of their historical valuation range with a
(2) business catalyst that will cause other investors to recognize its undervaluation and a
(3) management team that can execute their plan and unlock the undervaluation.