Evaluate prospective companies by proprietary quantitative metrics:

 

• Screen by classic fundamental growth criteria; focus on historical trends in return on equity/assets, sales and earnings trends/growth, quality and stability of earnings and cash flow vs. industry/sector/market.

• Analyze historical revenue and earnings growth and forward growth based on consensus estimates and our own internal estimates of future growth to determine a candidate’s intrinsic value.

• Assess financial condition and stability: balance sheet analysis, changes in inventories, accounts receivable and payable, earnings quality ratio. Apply rigorous qualitative research to determine company’s prospects considering market position; potential for leadership and possible disruptive aspects of products/services.

• Review SEC filings, company presentations, press coverage, conference calls, analyst research (both Wall Street and independent).

• Analyze the company’s business model, assess the quality of management, talk to suppliers and customers, review strategic decisions, new products, innovations, cost cutting, insider transactions.

• Determine a candidate's total addressable market and the prospects for market share.

• Ultimate decision: Is this a business we want to own?