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
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:
Most investors are excited about other
"hot" areas of the market.
The company's industry is out of favor
or cyclically down.
It is unknown, ignored or overlooked by
the investing public.
Bad news of a temporary nature has scared
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
The company's fundamentals or outlook
Better opportunities for investing the
funds are identified.
The weighting of a particular stock has
exceeded our limit.
requires a consistent, disciplined methodology
And plenty of hard work.
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.