We approach research one stock at a time using a fundamental, bottom-up methodology. Our approach has been applied consistently since the products' founding. For more than ten years, we have focused on US small- and mid-capitalization companies and have conducted extensive on-site visits, interviews, and built earnings models for hundreds of companies in our defined space. This has enabled our team to develop a comprehensive research library on over 2000 companies from our investment universe. We believe the depth of our experience gives us a competitive edge that will enable our team to continue to achieve superior results.
All five members of our investment team have extensive experience as security analysts and perform all the substantive research for our products. We use a team approach in building portfolios and work in a collaborative way throughout the investment process. Research responsibilities for the analysts are divided by industry group so that each team member spends all of his/her time monitoring industry conditions and identifying attractive investment opportunities.
We utilize a proprietary valuation system as a tool to identify companies with significantly greater reward than risk. Once identified, we conduct our own thorough research on each security, including on-site management interviews, building our own earnings models, as well as supplier, competitor and customer checks. If our analysis confirms that the security is mis-priced, we initiate a position, if we believe we have identified a catalyst, which will cause others to recognize the company's value over the ensuing 12-18 months. We must also be confident that management can execute their plans. Our goal is to utilize our internal research to construct portfolios 'one stock at a time' that will meaningfully outperform the Russell Midcap Index over a complete market cycle.