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.