The Thompson Davis Asset Management Advantage: A 360° View
"We trust our disciplined and focused investing process enough to follow it."
The true test of any asset management firm is performance over time. Our growth and that of our clients have been fueled by our focused research methodology and our strict discipline. We do not follow the crowd. We search for companies under-followed and undervalued by the market. Our research team searches daily for growth companies using various methods: Insider buying filings, earnings announcements with sequential revenue and earnings growth, unusual trading volume, stocks hitting new highs, and companies trading at a discount to their growth rates.
When we identify a potential investment, we continue the process by analyzing the prospects' balance sheet, income statement and cash flows to help gauge the strength of the company. We frequently continue the research process by doing some or all of the following:
- Interviewing the CFO and/or the CEO
- Developing a one-year earnings model
- Talking to the company's suppliers, vendors, and competition to get a 360° view of the company
We believe proper due diligence and research of a company should not be limited solely to discussions with a company's management. By talking to vendors, competitors and other third parties, we obtain a complete unbiased analysis and a thorough risk/reward profile. Our aggressive growth and trading style follows a strict fundamental based methodology quantifying the risk / reward profile of each prospective investment. We think it is imperative to identify not only upside targets but downside risks as well.
Therefore, we are more price sensitive than time sensitive. At the core of our philosophy is the belief that earnings drive stock prices. We believe there is essentially a 100% correlation with the earnings progression of a company and how well its stock performs over time. With that in mind we search for "value" and realize the "price" we pay for a prospective company determines our return.