Investment Process

by Ethan Jones on July 29, 2009

We start by looking at primary research, the market environment, secular trends and finally Wall Street research.

Stocks are selected for our portfolios based on:

  • Opportunity – what is distinctive both near term and long term about the company or its industry group?
  • Strategy – How will management unlock the opportunity?
  • Execution – How well has management performed in the past and how are they incented to deliver future results?
  • Valuation – What is the risk/reward inherent in what we are paying for the stock?

We build our clients’ portfolios by evaluating each client’s goals and risk tolerance, analyzing existing holdings, and considering tax consequences.

Individual holdings are reviewed for possible sale for the following reasons:  a fifteen percent drop in price, price target reached, deterioration in the company’s fundamentals, the position size grows to 7%, or an unexpected change in management.  This list is not exhaustive but illustrates some of the sell disciplines that Crossvault employs.

The process is monitored by reviewing individual stock performance, asset allocation and portfolio results. Finally, we communicate with each client so that we are aware of any changes in the client’s goals and objectives.

This process is a cycle that is constantly evolving so that we are always current with respect to the investments as well as the client’s objectives.