| 
Strategy: Small Company Stock Strategy
Warren Isabelle is the lead Portfolio Manager for this strategy that holds between 30 and 40 small companies that fit the value criteria. Warren seeks to combine the risk adverse nature of value investing with the superior long term appreciation potential of small companies. In general all companies in the portfolio are under a billion dollars in market cap with the emphasis on companies that are trading below their estimated long-term economic value based on a number of statistical measures and qualitative assessments. A great deal of importance is placed on knowing management, determining a fair valuation and monitoring the investment thesis.
Ironwood Investment Management's investment philosophy is to combine the superior long-term performance of small company stocks with the risk adverse nature of value investing. The approach is to conduct thorough company analysis and to construct a portfolio containing 30-40 small company stocks that are priced at valuations that are substantially below each company's long-term economic value. The philosophy is to be a buyer of the business and to examine each potential investment as a potential acquirer would examine a company, its future prospects and management.
Investing in small companies, risk control is a paramount consideration in managing portfolios. As such, portfolios are not overweighed in accordance with index weightings and modest positions (less than 5%) per issue.
The Small Company Stock Strategy investment process looks to examine stocks employing both a quantitative and qualitative aspect to company research and selection. The 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 of less than $1 billion, is screened by applying standard value ratio analysis such as price/earnings, price/book, price/cash flow, and debt to capital. The resulting list will be examined applying both qualitative and qualitative measures to search for anomalies. Attention is give to companies that are 1) turnaround situations, 2) cyclical companies, 3) transition situations, or 4) emerging companies.
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.
| Return to Strategies/Products
|
|  |
About Us
