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Investment Processs Roanoke relies on fundamental analysis to identify companies that are experiencing high and accelerating growth rates. In addition to earnings per share growth of at least two times the S&P 500®, other important selection criteria include rapid unit growth with stable or rising profit margins, pricing flexibility, improving cash-flow characteristics, market dominance or a strong defensible market niche, access to capital, and skilled management with an ownership stake. While the process most often ferrets out emerging growth stocks, it also uncovers some special situations characterized by market valuations which significantly underestimate earnings potential. A key strength of Roanoke's investment process is the ability to take specific company analysis and develop it into broader investment themes which typically do not fit into traditional industry classifications and are not driven by macroeconomic factors. Often superior growth companies are capitalizing on broader trends that may have implications for a number of companies in the sector. By extending bottom-up company analysis into the realm of conceptual thinking, Roanoke has been able to exploit a number of important investment themes in technology, telecommunications, and health care. Other important components of the investment process include managing risk through careful portfolio construction and a defined sell discipline. Unless the growth expectations have increased significantly, a stock is sold when it meets the price objective set at purchase. Also, each portfolio company is continually scrutinized for signs of fundamental deterioration and is sold if it fails to meet expected growth parameters. Finally, unfavorable relative price performance triggers a reevaluation of the original purchase decision and may result in a sale. Click here for information about our Investment Product Offerings.
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