Sector Capital Management LLC

Description

At Sector Capital Management, we believe the most important factors in stock selection are: Earnings Growth, Price, Liquidity, and Safety (defined for our purposes as reduced risk for decline in value). Through a thorough evaluation of each of these factors, Sector Capital strives to provide high-quality portfolios demonstrating consistent added-value performance over their respective benchmarks. This, along with positive working relationships and direct client communication are the cornerstones of our successful investment program. The Relationship between Earnings Growth and Price: Sector Capital has developed a disciplined, objective investment process based primarily on a quantitative analysis of fundamental and technical factors. Through a quantitative, formula-driven evaluation of stock price versus earnings growth, Sector Capital Management is able to identify and select quality stocks trading at a discount relative to the present value of future earnings. This results in companies with high S&P and analyst ratings that have achieved superior earnings growth with relatively low P/E ratios. In addition to stock selection, the formula also encompasses a built-in sell discipline. The quantitative nature of the formula allows Sector Capital Management to have a disciplined approach that is objective and repeatable over time. The portfolios are reconstituted at least quarterly and rebalanced as needed. Liquidity: Although Sector Capital believes the relationship between earnings growth and stock price is the key factor in stock selection, it also believes that liquidity is important. The Sector Capital strategy evaluates market strength and liquidity by selecting actively traded stocks ranking among the leaders in trading volume. Safety: As a result of years of investment experience, Sector Capital’s investment specialists have an expertise in risk management and portfolio construction. Thorough research and tests were utilized to determine the optimal number of positions and weightings to hold in each portfolio to maximize reward, while still minimizing risk. Safety is realized as a result of stocks passing Sector Capital’s quantitative screens and liquidity standards. Additionally, with a mix of value and growth stocks, this style-balanced approach is designed to further minimize risk. Sector Capital’s investment philosophy is an innovative quantitative analysis designed to yield successful results. Its proven philosophy takes out the subjectivity of trying to predict future earnings and bases stock selection on historical earnings of companies that have proven themselves as solid performers. This results in high-quality stock portfolios, with consistent added-value performance over the applicable benchmark indices. With numerous investment products and easily accessible investment professionals, Sector Capital is sure to meet its clients varied investment needs.

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