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February 06, 2008
Strategy: Undervalued Companies
The fund focuses on overlooked companies that are trading at a significant discount to my estimate of net asset value. The investment strategy is opportunistic and not constrained by market capitalization, industry, or geographic location. There is no one factor that is considered above all others but a combination of factors play a role in stock selection such as a low price to tangible book value, price-to-earnings ratio, PEG, a high return on invested capital, a number of proprietary metrics, significant insider ownership, a strong management team, and a lack of analyst coverage. In addition, the fund focuses on undervalued companies in industries with positive underlying fundamentals. No effort is made to attempt to time investments. Although quantitative in nature, the investment decisions come down to independent research and judgment. The off-the-beaten path nature of the fund and the concentration of holdings make it difficult to compare to indices and also make the fund more volatile than more diversified portfolios in the short term with the goal of superior returns in the long run.
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