Small Cap Value
Twinleaf’s Small Cap Value strategy seeks to identify undervalued stocks that I believe have the potential to double in value in two years. I focus on buying only inexpensive stocks that my research suggests have the potential to be acquired at a premium to the stock’s current market value. I typically invest in stocks that have a $3 billion market cap or less - a market segment that I believe is often under-researched by other investors.
I leverage my experience in the tech, media and telecom industries in an effort to potentially gather an informational edge over other investors. Just as important, I try to avoid companies that do not have growth potential, have uncertain capex spending trends, poor governance and/or a management team whose interests are not aligned with shareholders.
I closely monitor about 150 potential stocks and develop valuation models for each of them. I then perform due diligence and investment research in an attempt to find best investment candidates. Then I typically speak to or meet with the management team running the companies in which I invest, often at conferences or trade shows, to help validate my theses.
I run a concentrated portfolio and usually hold between 8 to 12 stocks, mostly in the tech, media and telecom sectors. My investments usually have market values of less than $2 billion, and do not usually exceed $3 billion.
I typically sell stocks when they have reached my price targets or when a company has agreed to be acquired. I also may sell when my investment thesis for a particular stock has changed due to competitive, operational or management issues. Stocks also may be sold if my research suggests that they no longer have at least 50% upside potential over the next 18 months.
I may defer the sale of a stock in order to achieve long-term capital gains tax treatment for the investment.
Small cap, leverage
Covestor inception June 12, 2013
|as of September 29, 2014
||Manager (net of fees)
|Past 30 days
|Past 90 days
|Past 365 days
|Since Covestor inception (Annualized)
Last 365 days
|as of September 29, 2014
||Manager (net of fees)
|Best 30 days
|Worst 30 days
|Value-at-risk (95%, 1 week)
||vs. Russell 2000
||vs. S&P 500
Average trades per month 1.5
Past performance is no guarantee of future results.
Performance of the portfolio manager's account is calculated by Covestor on a daily time-weighted basis, including cash, dividends and earnings distributions and broker commissions. Manager returns include trades and positions that fail Covestor's trading rules, as a result, actual client returns will differ. Covestor advisory fees are simulated and applied retro-actively to present the portfolio return "net-of-fees".
Average client returns are calculated by Covestor and are composed of the average, time-weighted returns of all active client investments (some of which may contain investment restrictions) to the underlying portfolio. These daily average returns are then linked together for the timeframe presented. These returns include cash, dividends, earnings distributions, brokerage commissions and Covestor advisory fees.
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Benchmark returns have been calculated by Covestor using a time-weighted calculation of daily index valuations. Benchmarks presented are total return and therefore inclusive of cash, dividends and earnings distributions but not transaction costs.
Leverage indicates the level of margin utilized and is calculated by dividing gross exposure by portfolio net liquidation value.
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Transactions that are marked as "Replicable" passed Covestor's trading rules and were eligible for replication at the time of execution, subject to individual
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