Investment Management
Quality. Valuation. Long-Term Growth. Capital Preservation.
Isthmus Partners’ Domestic Equity Investment Team actively manages portfolios of individual securities supported by disciplined quantitative and fundamental research. We offer three domestic equity stock strategies: Large Cap Core Equity, Small-Mid Cap Core Equity and Small Cap Core Equity. We also manage fixed income (bonds) and an international stock strategy that utilizes mutual funds and ETFs.
Quality and valuation are cornerstones of the security selection in all of our strategies. We are relentlessly focused on generating solid results throughout market cycles and are not influenced by the “herd effect” that often chases short-term results and momentum-driven stocks.
We conduct our own domestic equity research to select large, small-mid and small U.S. companies for individual purchase. We seek stocks that are both attractively priced and offer upside potential. Our process begins with our proprietary methodology to generate sector specific quality screens that focus on factors or sets of factors that have historically led to excess returns. By using our proprietary process, we identify companies that meet our valuation and quality criteria and have attributes that may lead to excess return.
We then narrow the universe of investable stocks to a smaller group for closer scrutiny. Then, we conduct extensive fundamental analysis including analyzing financial statements, modeling future cash flows and participating on earnings calls. We establish target prices we expect a stock may meet over time and continue to closely analyze each stock we select for investment. We sell when a stock meets our target price or when our investment thesis changes. Typically, our turnover is low relative to many mutual funds and other domestic equity investment strategies.
We structure client portfolios to match their specific risk tolerances by varying the relative sizes of their equity and fixed-income portfolios. Within the bond allocation, we focus on U.S. Treasury and FDIC insured certificates of deposit, along with the highest-quality municipal and corporate bonds. We are conservative in our approach to fixed income, as we believe our investors are best served by primarily concentrating risk in their equity allocations.
We believe most investors are well-served to have a portion of their equity portfolios allocated to non-U.S. stocks. This is the one area where we allocate to pooled investment vehicles (mutual funds managed by third parties and ETFs) rather than purchasing individual securities on behalf of our clients. Although we don’t directly manage the international stock allocations, we closely monitor and evaluate the third-party managers.