Small Cap Growth is a small cap equity strategy that seeks growth primarily in smaller companies that are rapidly growing with cutting-edge products, visionary management, and the ability to bring innovation to both new and established industries. The portfolio typically holds 30 to 40 stocks in companies focused on niche areas of the economy. These highly-focused businesses tend to be more profitable, have larger barriers to entry, execute better and are often attractive acquisition candidates.
Our approach
Oak’s investment team manages this portfolio collaboratively with a top-down and bottom-up investment approach.
The investment process begins with a top-down approach, analyzing key factors and identifying long-term trends. The managers then determine the sectors and industries with the best potential for long-term growth. Stock selection is based on both qualitative and quantitative factors, with the managers favoring companies which possess above-average growth potential at attractive prices.
Top-down
Our process begins with a top-down look at long-term investment opportunities. The top-down analysis takes into consideration long-term investment themes, such as globalization, demographics, productivity and innovation. Portfolio holdings are focused on a specific niche, which allows the company to execute better than competitors and avoid challenges from larger firms. The portfolio will invest in growth wherever it is occurring and is not limited by traditional sectors or historical metrics.
Bottom-up
As part of the bottom-up process, we employ a fundamental-driven approach to determine which companies are best positioned to capitalize on our investment thesis. Buy-candidates are evaluated on their position in the industry, market opportunity, current valuation and risk-reward. We consider both fundamental and technical characteristics when determining an attractive entry point. Other factors in the company-level analysis include relative valuation, traditional multiples analysis and discounted cash-flow valuation methods. We pay particular attention to the sustainability of a company’s earnings.
The Small-Cap Growth strategy is also available as a mutual fund, River Oak Discovery Fund (RIVSX).
Email the Relationship Management Team or call 330-668-1234