Frantzen Capital Management
Performance

Investment Philosophy

Our research and experience have proven that the best investments are companies with a history of exceeding expectations – those that deliver higher sales, earnings, and relative value than do their competitors. As experienced research analysts and portfolio managers, we have witnessed the constant and sometimes rapid rise that can occur once these great companies appear on the radar screens of the broader market. As patient market researchers and investors who are willing to conduct the extensive research required and are dedicated to tracking the movement of these companies at the earliest stages of consideration, we believe we can identify great stocks on behalf of our clients.

We believe that price movements up or down reflect the collective expectations of all buyers. Adhering to this belief, our investment objectives are based upon not only understanding the fundamental strengths of a specific company within a GARP framework separate and distinct from the company’s current stock characteristics, but in also understanding the dynamics of the market which are impacting those stock characteristics. Through this process, we seek to identify only those investments that represent the highest combination of good company/good stock characteristics. We have tremendous confidence in our research capabilities, but to that we add a strong realistic perspective of the stock market.

While we are patient investors on the upside, we are quick to sell a stock if our collective research process signals the stock may come under selling pressure. Once this is confirmed, we are quick to replace the position with a more attractive security from our “on deck” list. This process has contributed to the very favorable downside risk ratio we have been able to achieve.

Investment Process

Our objective is simple. We seek to identify great growth companies that are also great growth stocks to own. To find the best investments for each portfolio, we are committed to the following:

  • We believe in the fundamental principles of GARP; identifying solid growth stocks at a reasonable price. Purchasing growth at a reasonable price is a classic fundamental approach to evaluating stocks. Driven by our research, our highly structured, fundamental screening process is the core of our investment management philosophy.

  • We believe in extensive and thorough research; we utilize our qualitative and technical insights to move beyond core fundamentals. Unique to our process is the incorporation of qualitative screens and momentum characteristics into our core fundamental screening process, which is driven by our research.

  • We believe that momentum matters. To this end, we apply a momentum overlay specific to sales, earnings, and relative market strength to each ‘good company’ that we identify. This additional step affirms our research and elucidates the catalyst that signals that a great company is becoming a great stock to own.

  • Through this philosophy we bring to bear our deep experience as researchers and investors. We use the qualitative and technical insight we garner by observing the market, the industry, and the stock to determine momentum and the likely behavior of that stock. We couple these principles with our commitment to a structured portfolio construction process to ensure adequate diversification and a strong, time tested buy and sell discipline.

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