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Winning Characteristics

Extensive backtesting research and the experience that comes with being in the business for 25 years have enabled us to uncover some of the best predictors of investment returns over many decades.  These characteristics include:

  • Value – Stocks trading at bargain prices relative to their earnings, cash flows and other metrics.
  • Positive Momentum – Investments experiencing favorable trends in stock price appreciation, analyst sentiment, and earnings performance.
  • Insider Buying – Stocks where corporations are buying back their own shares or management is buying for their own personal investment.
  • Low Risk – Companies with stability and consistency in both their financial and stock price performance.
  • Strong Foundation – Businesses with strong fundamentals including balance sheet strength and earnings quality.

Utilizing each of these categories by themselves could have been a profitable investment strategy; however, combining them to select stocks yielded even higher returns according to our research.

The real key lies in estimating which combination of factors are going to work the best in the future.  To accomplish this, we utilize our proprietary “When Will It Work” analysis which incorporates a value-oriented approach to factor selection.  In other words, we’re trying to get the right factors at the right time to maximize our odds of outperforming.