Philosophy/Process

 

1  Know what you own 

  • Fundamentals drive stock prices over long-term
  • Quality, Transparent Companies
  • Little to No Debt, Strong Cash Positions

2  Know what you're paying for growth

  • Invest in ownership interests of companies
  • Determine "Enterprise Value"
  • Avoid hype and momentum stocks

3  Know the "Growth Story"

  • What is the catalyst for growth?
  • Why do we want to own it here?

 


 
  WE OWN

  • Growing revenue
  • Margin expansion
  • Catalyst verifiable from outside sources/channel checks
  • Transparent, clean balance sheets
  • Enterprise value at discount-to-growth rate
  • Long-term earnings power
  • Self-Funded (Organic Grower)

 WE DON'T OWN

  • Nontransparent businesses (i.e. Banks)
  • Companies with no earnings (i.e. Biotech)
  • Financially leveraged companies
  • Hype/momentum companies
  • Companies fully priced at forward growth rate
  • Companies simply because they are in an index

 

 

 



Print Page
Copyright 2008-2011 Sparta