To Succeed In Today's Difficult Stock Market Environment
The history of the stock market is marked by periods of volatility reflecting economic and political uncertainty. In order to reap the long-term benefits of participating in the profit growth of companies, investors must look beyond short-term volatility normally associated with owning stocks and focus on the likelihood that certain businesses will be more valuable in the future than they are today. To achieve above average returns over the long-term one must see something significant that others do not. Making decisions based on what one often reads in the media and/or debates with friends is pointless - a fool's game. To succeed in today's difficult stock market environment requires an understanding of the market's historical movements and then the consistent application of sound investment principles.
Investment Strategies And Process
The primary objective is long-term capital appreciation by producing returns comparable to the S&P 500 index. Portfolios are actively managed and consist primarily of companies that are greater than $2 billion in market capitalization. H&S utilizes a focused bottom-up approach that identifies companies whose growth potential is not fully reflected in their current stock market valuations; an approach grounded in fundamental research and meticulous analytics, not simply the latest trends.
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Selection Criteria
Companies targeted for investment are believed to have superior management teams with strong and enduring business models enabling them to achieve exceptional top line growth. Some of the characteristics emphasized in selecting companies for investment within a managed stock portfolio include a company's:
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Prospects for capitalizing on broad investment and economic trends |
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Ability to maintain inherent sustainable advantages over its competitors |
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Dominant market position and strong franchise value in its respective sector |
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Consistent earnings growth |
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Financial strength |
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Intrinsic value and the growth potential for the company's industry |
Continuous Monitoring And Review
The decision to hold or sell a stock is as important in achieving superior performance results as the decision to buy a stock. To ensure the consistency and integrity of the investment process, H&S has established guidelines for selling a stock position. Stocks are sold or "trimmed" for one or more of the following reasons: changes in a company's management, adverse market conditions, long-term fundamental earnings prospects that fall short of expectations, overvaluation and, finally, the availability of more attractive investment opportunities.
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