We manage both a large cap and mid cap individual stock portfolio. Each of these strategies has a history of above market returns with below market risk.
Our portfolios are well diversified across all industry sectors. Our analysis of the current economic cycle and where we think the economy is trending will cause us to overweight certain market sectors and underweight others. We then select those stocks that we feel will offer the best change for future growth within each market sector. Our portfolios typically have between 25 and 30 stocks with a turnover ratio of around 30%.
We screen a database of stocks based on a variety of fundamental ratios such as debt to equity, price to earnings, and forward earnings per share growth rates. We are looking for companies that we believe will experience above average earnings growth that can be purchased at or below average PE ratios.
We then assess the management of those companies and how they are compensated to make sure their interests are aligned with those of the shareholders.
We will typically sell those positions if the earnings growth rates significantly decline, the PE gets ahead of itself or there is a significant change in management for no apparent good reason.