Intensive company research used to assess which companies will be the major beneficiaries of an industry or sector theme.
Face-to-face interviews with companies, their competition and suppliers to accurately analyze finances and understand managements’ plans and motivations.
Our investment approach is based on four key beliefs:
Opportunity is ours to find. We believe every market cycle offers opportunity, stocks that have the wind at their back and can be purchased at reasonable valuations—no excuses. We search for small cap companies whose stocks we believe can appreciate regardless of the market environment.
Research gives us the edge. When investing in small cap stocks, there’s no substitute for exhaustive fundamental research. We meet with some 1,000 companies a year. These face-to-face meetings allow us to discern management’s ability to execute their business plans. We also learn more about their competitors and supply chain, gaining insight into economic forces or new technologies that may propel growth.
Triangulation reveals the target. Drawing on our research, we use our proprietary valuation technique to derive a price target based on cash flow, earnings and industry-specific metrics. Then, we triangulate these results to create solid target values for entering and exiting a portfolio position.
Our goals are aligned with yours. 1492 Capital Management is performance-driven. We strive to consistently outperform our benchmarks, and we’ve created incentives for our portfolio team aligned with that goal.
Company meetings and the subsequent in-depth research gives us insight into the broader economic forces that enable companies to grow and compete. It is the key to measuring opportunity—and constructing a portfolio intended to help you meet your goals.