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Our Investment Approach
Investing in smaller cap companies is relatively inefficient because they are generally unknown or misunderstood.
At SAM, our search for undiscovered gems starts with a systematic screening process to identify companies with high quality financial characteristics and growth. Next, we focus on understanding the business and industry fundamentals to identify a catalyst for positive change, whether in revenues, cash flow or earnings. We pay particular attention to management teams whose financial incentives are aligned with outside shareholders. Lastly, the price must be right and we are highly sensitive to valuation. We don't swing at every pitch and part of our investing discipline is maintaining a watchlist of high quality companies and management teams that we monitor.
We take big positions relative to the portfolio. A starting investment must be at least 2.0% of the portfolio and we automatically trim the position at 6.0% for risk management.
We operate with a "best ideas" mandate and invest in no more than 30 small/mid-cap stocks. We are true active managers, and our goal is to outperform the market by not looking like it.
We are an independent, single product firm with no conflicting strategies. We are able to make investments that may be currently unpopular, but have a high-return potential over multiple years.
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