Investment Approach

We employ a disciplined approach to securities and valuation analysis in an effort to uncover companies we perceive to be mis-priced by the marketplace.  The core principles of the strategy are: a disciplined emphasis on absolute value; fundamentally-based analysis of investment opportunities; a focused portfolio; selective short-selling; and a long-term analytical view.

When determining a potential investment’s intrinsic or expected value, we perform fundamental analysis including financial statement analysis, industry analysis and an estimation of free cash flow generation.  Value is typically determined based on these factors and selected valuation methods with the free cash flow capability of the given business over the long-term often taking precedent over other factors.  In some cases, we identify these opportunities in special situations such as spin-offs, holding company discounts and stub positions where we attempt to capitalize on valuation dislocations resulting from corporate actions or structural complexity.

We also engage in selective short-selling in situations where we identify securities that we believe are unsustainably overvalued relative to our assessment of fundamental underlying value.  While some of our short positions have direct or indirect relationships to long positions, we typically target individually selected, stand-alone shorts that we believe will contribute positively to returns over the long-term.