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    Small-Cap Growth

     

    The Small-Cap Equity Composite is a diversified portfolio invested in 30 to 40 Small-Cap growth equity securities, defined as having a market capitalization floor of $350 million and inclusion in the Russell 2000 index or an equivalent, nationally recognized Small-Cap index.

    Investment Process

    STEP 1

    Idea Generation

    “MOA” (Maker of Alpha)

    Proprietary stock screen run weekly

    Developed utilitzing research dating back to 1935

    • Identifies common characteristics of stocks in the early stage of a significant and steady price appreciation trend

     

    Identifies acceleration and improvement in:

    • Free cash flow

    • Revenue

    • Earnings

    • Profit margins

    • Relative strength and momentum

     

    The MOA screen reduces roughly 7,500 potential candidates down to an average of 10 to 20 candidates for further analysis.

    STEP 2

    Quantitative Ranking

    Propietary “Competitive Scoring System”

    Stocks are ranked from most attractive to least attractive

     

    Compares 144 variables to the industry, sector, and S&P 500

     

    Provides overall score and sub-category weightings:

    • Risk

    • Return

    • Margins

    • Growth

    • Turnover

    • Valuation

    • Balance Sheet Liquidity

    • Industry Outlook

     

    Setting the priorities for further review.

    STEP 3

    Grunt Work

    Exhaustive research money managers are paid to perform

    STEP 4

    Portfolio Construction

    Fundamental Research: Focuses on cash flow, earnings quality, earnings estimate revisions, and debt exposure

     

    Technical Research: Explores trend lines, pricing patterns, Gannangles and Fibonacci retracement lines - “Where we make the difference”

    Target 30-40 companies that are positioned for internally funded sustainable growth, have superior technical characteristics, and are identifiably undervalued relative to their appreciation potential

     

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