The Informed Investor Strategy

T.H. Fitzgerald & Co.’s Informed Investor Strategy seeks to capture the potential high alpha risk-adjusted return which scores of independent researchers have, over the past 50 or more years, identified in common stocks of companies where management or large outside investors are significant common stock buyers or owners, or where the company itself is repurchasing its own shares on the open market.

 Common sense suggests that corporate officers and directors are far closer to the day-to-day activities of the companies they own or manage -- and are often in a much more informed position to gauge the long-term effect certain publicly disclosed information or developments may have on the future price of their company’s stock -- than the typical Wall Street “expert.” These informed investors are not following a stock trading strategy that feeds off short-term momentum. Rather, they are long-term investors who concentrate primarily on positive earnings developments within their own companies.

The catalyst of this strategy is Informed Investor ownership; but, investment decision-making is triggered by detailed research analysis of a candidate company’s financial stability and strength, its internal valuation and pricing ratios, sector leadership and, most significantly, the sustainability of the earnings growth rate.

It is a risk-averse, long only strategy, avoiding “turn-around” fad and glamour stocks masquerading as disciplines.  The over-riding commitment is to a clearly defined, disciplined management approach that emphasizes quality companies with solid management, predictive earnings and improving financial and operating characteristics. Click here for the Informed Investor Process.