Opportunity
Pricing inefficiency is not only a Canadian phenomenon for smaller companies. It exists in the United States as well and creates a unique opportunity to invest in companies lead by entrepreneurs that are operating in the most accommodative culture and regulatory environment in the world for entrepreneurs. The large universe of U.S. equities means the portfolio managers can identify almost any growth trajectory in any sector to take advantage of the best valuations in offering investors a valuable complement to their Canadian equity investments.
U.S. small caps – top 10 positives for 2012 – January 2012 (434 KB)
Strategy
We constantly look forward, endeavouring to find the next world-class, undiscovered small company. We look for companies with high returns on equity and strong cash flow growth, but refuse to overpay for growth. To minimize downside risk, we take a value approach to investing in U.S. micro and small caps. Additionally, our companies must have quality management teams, clean balance sheets, and strengthening competitive positions in their industries.
Key advantages
Niche expertise: With over a decade of proven outperformance in small/mid cap equity investing, our portfolio managers excel at identifying undervalued securities with significant growth potential before the market recognizes their value.
Focused and independent insight: Our investment management group has a deep roster of experienced professionals that allows the portfolio managers to objectively view an investment's merits in making informed decisions. We choose to know a lot about niches like smaller companies in the U.S., rather than a little about everything.
Proven and repeatable methodology: Our portfolio management team ensures that we build portfolios that are more attractive than the market based on the key value and momentum metrics that have been proven historically to result in favourable investment outcomes.
Long-term focus: We focus on each investment's long-term prospects and not necessarily the next quarter's earnings. Short-term market turbulence is often viewed as an opportunity to profit from inefficient markets by selectively adding to positions in our favourite investments.