Client accounts are actively managed on a discretionary basis, but not aggressively traded. GPM favors a value-oriented, multi-cap approach to stock investing.
Our research seeks to identify stocks currently trading at prices substantially below their intrinsic value.
Our analysts follow securities and companies on their assignment lists closely and provide timely updates and recommendations to other team members. GPMStock, our proprietary database, tracks about 5,500 stocks, ETFs, closed-end funds and indices. We monitor markets, screen our data and evaluate opportunities in an efficient and disciplined manner. We develop a clear understanding of a company's fundamentals and unique operational risks. We look for undervalued or understated assets and/or contingent liabilities and consider debt levels, interest cost, maturity schedules and opportunities to reduce interest expense. Our buy list is normally comprised of 150 to 200 fundamentally attractive companies. Fundamentals and technicals are used in determining when to buy and sell.
Our broad list is a dynamic database that contains information on about 5.500 companies. It merges historical operating data with daily stock price and trading volume trends.
Our focus list consists of 150 to 200 companies from across all market-cap segments, with strong positions in the markets they serve. We like niche businesses capable of generating superior sales and earnings growth and historically well-run companies that have stumbled, but are now in turnaround mode. We also favor strategic acquirers and stocks that are attractive acquisition candidates. We look for fundamental changes or "catalysts" that can lead to an increase in the level of attention given to a stock.
Our buy list is dynamic and comprised of current favorite stocks from our focus list. These are companies that can be acquired broadly, in all of our stock and balanced accounts. Ideally, these positions will be reasonably liquid.
Acquisition candidates will normally meet most of the following criteria:
Strong balance sheet with undervalued assets and/or hidden value
Predictable growth in revenue, earnings and cash flow
Relatively inexpensive based on price/sales and price/estimated earnings
Undervalued on the basis of price/net cash flow
Manageable capital expenditures, acquisition plans and future capital needs
The underlying business value is substantially greater than the current share price and growing. We quantify the short and long term growth prospects relative to peer group companies and estimate the value of the entire business on a per share basis. Our analysis should provide reason to expect this "Valuation Gap", to be filled within two years through stock price appreciation.
Large "insider" stock ownership by management, directors and others close to the company. We give special consideration to recent insider trading activity.