Objective and Consistent
CornerCap employs a four-step investment process, but the two major components of the process are our quantitative screening model and qualitative research methods. The quantitative portion is based on our multivariate investment model called Fundametrics®. It is the first step of our process and determines potential buy and sell candidates. The second major component of our process is extensive qualitative fundamental analysis. This aspect of the process seeks to validate our model's output.
Fundametrics®
Our quantitative screening model continually evaluates a broad universe of stocks using multiple security databases. The model ranks all stocks in the database across six, contrarian-weighted fundamental characteristics we believe have the most explanatory power of subsequent relative price performance. Each stock is ranked in deciles. The top three deciles are buy candidates; the next four deciles are monitored closely; the bottom three deciles are sell candidates. We have measured the performance of our valuation models, by decile, for over 20 years.
Qualitative Research
We conduct an extensive qualitative analysis on all potential buy and sell candidates produced by the model. The purpose of this analysis is to control risk and further enhance returns by providing an objective verification of the fundamental characteristics and forecasts used by our model. It ensures the financial quality or weakness of a company and allows our managers to make prudent diversification decisions.
Our quantitatively driven investment approach is an unemotional and fundamentally based method of selecting stocks of high quality companies that are attractively valued relative to current fundamentals and future growth potential.
|
