- Industries at cyclical troughs
- Fundamental screens to discover under-earning companies
- Proprietary database of companies that have been owned or extensively researched
- Identify specific drivers of the fundamental turnaround
- Assess competitive stability and capital adequacy
- Build financial model to determine price target
- Idea meets the Four Cs criteria
- Appreciation potential > Portfolio average (typically 50-70%)
- Initial portfolio weight is typically between 4-6%
- Security reaches target price
- Fundamental turnaround is realized
- One of the 4 Cs is compromised