Research Process

Our research process involves utilizing an array of research tools that enable us to find worthy companies. Upon discovering these companies, we then focus our attention on the ones that we understand, ultimately selecting those of the highest quality. Our research process involves the following:

Searching for companies possessing a sustainable competitive advantage that are run by competent, shareholder-friendly management teams. Through a process of elimination, we narrow down the universe of stocks to those that satisfy the above characteristics.

Utilizing an array of research tools. An immense amount of time and effort is required in order to identify those companies worthy of potential purchase. Our sources of research information include company websites, annual reports, investment periodicals, trade publications, and SEC filings. Investment industry functions also aid our research efforts.

Focusing on businesses that we are able to understand. Although a company may have all of the attributes we are looking for, it has to be within our circle of competence. In other words, if we feel that we cannot adequately understand a company or the industry it operates in, we will not allow the company to be placed on our list of potential investment candidates.

Selecting quality companies. Unlike the majority of investment firms that consider a multitude of publicly-traded companies for potential purchase, we are very selective. We feel this is a critical first-step in managing the risk of the portfolios we manage. Over the course of many years, we have compiled a list of approximately 350 companies that meet our definition of attractive investment candidates worthy of potential purchase. These firms become part of our monitoring list, a selective list that continues to evolve due to our diligent research process.