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Investment Philosophy: Process
Ironwood Investment Management investment process examines small companies employing both a quantitative and qualitative aspect to company research and selection. Our goal is to uncover a company with a stock price that is trading at a large discount to the actual economic value of the underlying company. Ironwood's investment universe of domestic stocks with market capitalization's of less than $1 billion (appox. 3,000 stocks) is screened by applying standard value ratio analysis such as price/earnings, price/book, price/cash flow, debt to capital. The result list are statistically cheap companies that will be examined further by applying both qualitative and quantitative measures to search for pricing anomalies, a catalyst and potential by the Portfolio Managers and Analyst.
The resulting candidates are modeled to determine the long-term economic value of the company and to establish a target price for the stock. Those that are selling at a substantial discount are then examined thoroughly on a company-by-company basis. Meetings with management and possible on-site visits are then conducted. The resulting securities may then be placed into the portfolio. |
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