Our Security Selection Process Involves:
Identifying Macro Drivers
Economic, political and sentiment drivers shape portfolio themes and weights.
Prospect List Definition
Basic quantitative screening process to help minimize risk and narrow the prospect list. Research Analysts screen any securities with insufficient liquidity or solvency. Securities are further screened based on our macro views including valuation and/or style. Lastly, an outlier analysis is conducted to identify any stocks with categorization, pricing, business activities and/or other characteristics outside of the peer group to ensure selected securities best leverage higher level themes.
Prospect list is further narrowed based upon fundamental research. Fundamental analysis includes:
Strategic Attribute Identification
Seek firms with underappreciated competitive or comparative advantages relative to peers.
Strategic Attribute Preferences
Identify attributes that best leverage portfolio themes.
Attribute Execution Analysis
Evaluates if the firm’s management has a cohesive executable plan for exploiting its strategic attribute(s).
Relative Valuation Analysis
Examines current valuations relative to peers, historic valuations, and the market.
Operational Risk Assessment
Operational red flag assessment to identify potential risks unrelated to valuations or day-to-day management.