Investment Services

 

Cross-disciplinary collaboration and synergy among the investment research team has proven to be a key element in the firm’s success and further informs our view on risk and opportunity.

 

EQUITY

Long-only equity strategies with disciplined institutional processes.

 

Small Cap Growth - Strategy Highlights:

• Experienced team - Portfolio Managers have worked together since the company’s inception
• Fundamental research-driven process - Investment process identifies high-quality businesses with sustainable competitive advantages
• Risk before return - Portfolio Managers prioritize downside risk before potential return

 

Fundamental Research

The Small Cap Growth team conducts in-depth, fundamental research to uncover companies that, in their opinion, can control their own economic destiny. The team starts by identifying business with a strong competitive advantage and high barriers to entry. They then narrow the search to companies with large potential markets and with what the managers believe are high-quality businesses focused on the future. Lastly, the possible stock price scenarios are analyzed with a focus on the potential downside risk.

 

Competitive Advantage

• High barrier to entry
• Product differentiation
• Pricing power

 

Addressable Market

• Increasingly large market opportunity
• Low existing penetration
• Secular tailwinds
• Longer period of rapid growth

 

High-Quality Business

• Scalable model
• Predictable and recurring revenue stream
• Improving margins and return on invested capital

 

Attractive Risk/Reward

• Determine range of possible outcomes rather than target price
• Focus on downside risk

 

MUTUAL FUNDS

With Byron Stafford Family of Funds, individual and institutional clients gain access to a broad array of investment options overseen by experienced, highly regarded portfolio managers.

 

We strive to deliver superior fund performance without exposing clients to disproportionate risk through consistent and reliable investment management strategies. This stalwart philosophy has been helping investors reach their long-term investment goals since the fund family’s founding.

 

CONTRARIAN

Strategy Highlights:

• Experienced team - Portfolio Managers have worked together since the company’s inception
• Fundamental research-driven process - Out-of-favor companies that may have depressed valuations and visible catalysts for sustainable improvement
• Risk before return - Portfolio Managers prioritize downside risk before potential return

 

Fundamental Research

The Contrarian team conducts in-depth, fundamental research to uncover out-of-favor companies that have depressed valuations and visible catalysts for sustainable improvement in business fundamentals.

 

Screen for Earnings Decline

• Screen for companies that have reported multiple year-over-year earnings declines; typically, at least three quarters in a row
• Eliminate micro-cap companies with less than $250 million market cap

 

Assess Quality of Business

• Industry strength
• Durable competitive advantage
• Sustainable future earnings growth
• Improving return on invested capital and free cash flow

 

Identify Reasons for Decline

• Company-specific
• Costly investment cycle
• Missed product cycle
• Poor acquisition
• Industry-specific downturn
• General economic weakness

 

Determine if Earnings Rebound

• Coherent turnaround plan
• Fixed product/service responsible for issues
• Strong new or existing management
• Industry conducive to growth
• Expectations properly reset

 

Analyze Appropriate Valuation

• Evaluate price to normalized earnings upon return to growth
• Upside scenario if investment thesis materializes
• Downside scenario if issues persist

 

ALTERNATIVES

Multi-asset capabilities that focus on asymmetrical risk/return

 

Fixed Income Alternatives

A Strategy that Seeks:

• Capital preservation
• Low volatility
• Absolute return
• High current income

 

The team seeks to generate current income and preserve capital in a low volatility portfolio of diverse fixed income securities. We perform in-depth fundamental research to identify asymmetric risk/reward opportunities. We seek to minimize risk through security and sector diversification, while utilizing hedging strategies to reduce individual security and portfolio risk.

 

Multi-Asset

A strategy that seeks:

• Absolute return
• Asymmetric risk/reward opportunities across the capital structure
• Capital preservation
• Low volatility, low correlation

 

The team seeks to construct a multi-asset, opportunistic solution to deliver absolute returns through an uncorrelated portfolio of diverse securities. We perform in-depth fundamental research to uncover and create asymmetric risk/reward opportunities across the capital structure. Investments are primarily in niche credit strategies and individual hedged equity structures that allow us to optimize our fundamental view. The strategy’s thoughtful asset allocation results in consistent risk-adjusted returns that serve to minimize drawdowns and reduce correlation in order to meet client investment objectives.