R. Nickles & Company - Investment Philosophy

Our investment approach is the result of over twenty-four years of experience. The methodology is centered on owning successful, growing businesses by acquiring their stock. We identify currently undervalued companies where positive or improving operating fundamentals are unappreciated by the market place. We are seeking growth when buying, but there is also a value component in our approach. Our basic philosophy is centered around identifying companies with superior earnings growth possibilities. Those candidates are subjected to a rigorous value screening process to ensure we don't overpay for a stock. The objective of this fundamental analysis is to obtain an earnings outlook for the next twelve to thirty-six months. After applying our fundamental analysis, stock candidates are further subjected to a panel of proprietary technical indicators developed by R. Nickles & Company, Inc. These technical tools provide the necessary keys to provide invaluable, immediate buy or sell decisions.

focuses on seeking out undervalued companies where positive and/or improved fundamentals are unappreciated by the market. Contrarian thinking, looking in areas out of favor with the investing public, is a significant contributor to our selection process. This can be from a top down perspective when choosing a sector or from a bottom up perspective when choosing a stock. We may choose to invest in a sector or industry experiencing an extremely strong operating environment and then search for the company in that arena which we believe has been overlooked, ignored or otherwise underestimated as to potential. On the other hand, if investing in an out-of-favor sector or industry, we will typically search for companies displaying the best fundamentals and possessing strong competitive positions. Many times this will be the industry leader(s) and will not necessarily be the most ignored nor undervalued company in the industry.

, once an opportunity is found, entails critically evaluating the operating and financial basics of the company. This involves extensive detailed work to determine that the company is fundamentally sound. In addition, we look for changing conditions or strategies that could improve the company's valuation and recognition over time. Throughout this process it is also important that we identify hidden value or unrecognized potential.

is the art of purchasing a good company at a favorable price. Once we identify a company that we would like to own, we may have to wait patiently for an opportunity to purchase its stock at a bargain price. In so doing, however, we have already given ourselves a better chance to make a profit. There are many reasons good companies may be temporarily undervalued:

is an unending process as long as a company is an active investment in our portfolios. During the time we own a stock, we carefully monitor the company's progress, watching for improvements or deterioration in its operating fundamentals. We are careful to notice if plans and strategies are being implemented and if performance targets are being obtained as expected.

is the discipline of recognizing when a company's stock is approaching our appraisal of its full value. Other reasons to sell include:

requires a consistent, disciplined methodology that includes:

The stock market can be a volatile and frightening place for investors who lack the experience and discipline to remain calm when market emotions are running high. A time tested highly disciplined approach to investing in today's markets is an absolute must.