Our investment philosophy is predicated on the idea that strong and sustainable earnings growth drives stock price appreciation. We believe investing in high quality growth stocks with sound underlying fundamentals, leading edge products and/or services, and entrepreneurial management teams, provides a reliable conduit to the best quality earnings growth and price appreciation.

Research

• We typically look for new investments ideas through several sources including internally developed proprietary screens, conferences and industry publications. Once we identify a potential candidate the appropriate analyst will take a comprehensive look at the company to see if the growth characteristics we require are in place and whether they are likely to persist for a protracted length of time.

• We establish early and frequent contacts with companies and encourage them to articulate their business plan, goals and financial milestones. We also review SEC filings, and industry specific publications. If after performing a thorough evaluation, the analyst sees a compelling investment opportunity, a detailed report will be generated to educate the investment committee about the company and its prospects.

• Some of the report content includes an introduction to the company’s products or services, an evaluation of the market place and competitors, analysis of growth opportunities, detailed revenue and debt analysis, management biographies, risk analysis, financial statements and internally developed models. After an analyst has issued a research report to the investment committee a group examination of the idea begins.

• Our targeted companies provide leading edge products and services, with sustainable competitive advantages, superior management teams and strong financial controls. We look for a minimum of 15% revenue, unit and earnings growth over the prior 6 quarters with equal or better growth projected for the next 2 years.

• We favor companies leading their industry groups with strong relative strength. We prefer companies that are trading at reasonable price to earnings ratios versus our growth projections and the applicable peer group. We seek investments that present a minimum of 25% upside within 12 months.

• We manage risk by constructing portfolios on a stock-by-stock basis. Typically, the initial position size is between 1-3% of account assets with individual stocks no larger than 5% of assets. In the event the stock loses 15% or gains 50%, we review it and regularly sell a 1/3. We do not follow any index for the weighting of sectors.