About Us  
 

INVESTMENT PHILOSOPHY

McComsey Asset Management is a quantitative growth equity manager. We invest in successful, liquid, growing large capitalization companies with little or no debt, while adhering to diversification disciplines to minimize risk. By relying on factors our firm can quantify, we form the basis for a repeatable investment process. The consistent back-testing of our quantitative model contributes in making this unique investment process effective and sustainable.

Our growth philosophy is founded on analysts’ earnings estimate revisions with an objective of high alpha and low risk. Built on the premise that company earnings are the key driver of stock performance, this sophisticated model incorporates our comprehensive examination of key analysts’ earnings estimate revisions. Our systematic and disciplined evaluation of the most effective analysts’ opinions removes subjectivity and results in optimal use of the most accurate earnings forecast revisions.

We believe a strong sell discipline is crucial in achieving our goal to outperform in up and down markets. In applying our strong sell/rebalance discipline, we seek to recognize deterioration early, avoid selling winners too soon and maintain balanced position sizes. These measures enable us to capture alpha while remaining well diversified.

FIRM PHILOSOPHY

At McComsey Asset Management, we make a commitment to excel at client service.

Our entire team is knowledgeable about your account and highly responsive. We have made substantial investments in leading-edge technologies to provide best trade execution and timely, accurate, easily accessible reporting. We have developed and abide by strong compliance systems. We provide written quarterly commentaries and strategy updates.

As always, our team is readily accessible to clients for meetings and calls.

 
 

INVESTMENT PROCESS

Our sophisticated, back-tested investment process involves both quality and growth screens. Beginning with a broad universe of successful companies, we search for essential equity metrics of large capitalization, profitability, high liquidity, and low company debt loads. On an ongoing basis, we back-test these screens and factors utilizing rank analysis and adapt our model accordingly. We systematically use these optimally weighted metrics to filter the universe down to more stable businesses which still retain a foundation for growth.

In our pursuit of superior growth companies, we further refine our investable universe by searching for stocks experiencing positive earnings estimate revisions for 12 & 24 month forward looking periods. We require multiple positive revisions be forecasted by accurately ranked analysts. To ensure breadth and depth of estimate accuracy, we systematically track and rank analyst earnings estimates on an 8 quarter rolling basis.

The highest ranked investment candidates are then further examined by our investment team to rule out any unforeseen company specific risk, such as management change or major litigation. The final outcomes is an integrated buy or sell decision.

Diversification Principles

We seek to reduce risk through strict diversification disciplines. We require participation in at least 7 of 10 major economic sectors. Furthermore, we limit individual sector exposure to 30 percent. On an individual security level, we limit position sizes to 5 percent or less on an initial basis and 7 percent on an appreciated basis. This approach results in a portfolio of stocks that are diversified on a sector as well as company specific basis. Cash will remain between 0 and 5 percent in a typical portfolio, although we seek to remain fully invested. Portfolios are monitored by our firm on an ongoing basis.

Sell Discipline

Our sell discipline is characterized by two parts:

First, we rebalance our portfolios in strict adherence to the diversification principles outlined above. Portfolio holdings are trimmed in order to introduce new purchases to the portfolio. Precise rebalancing according to our guidelines ensures that we realize profit and reduce risk by maintaining diversification.

The second element of our sell discipline is the process of fully divesting a position. Once added to the portfolio, a stock is monitored regularly for changes in all of the key metrics used in the purchase decision. We pay special attention to any material cuts in key analyst earnings forecasts in determining whether a firm is entering a negative earnings cycle. Deterioration in these key metrics often triggers a sell decision.

Model Enhancement

Our leverage of technology has provided the opportunity for effective back-testing of our strategy. Most importantly, our ongoing back-testing enables the strategy to adapt to changing market environments. Our screens and factors are constantly evaluated for effectiveness. Unlike other quantitative processes, we are constantly adjusting the sequencing of our screens and the weightings of our factors to achieve superior returns.