Losch Management Company is a traditional value investor with a contemporary, real-world perspective. We invest in a select group of high quality companies that have demonstrated consistent profit growth for ten to fifteen years. A company's long-term record is the best indicator of the company's culture, and its culture is the best evidence of potential for future appreciation. We believe in patience and that results matter more than a good story.
Stock Selection Process
We appraise a stock as if we were buying a business we would want to own long term. We use both fundamental analysis and quantitative metrics to identify undervalued companies with hidden growth potential. Our aim is to buy companies with a demonstrated ability for sustained long-term growth.
Losch Management concentrates its proprietary research-driven process on identifying promising growth stocks in the small-cap and mid-cap segments of the market. We look for companies with a record resulting from a culture dedicated to long-term growth. Employing both qualitative and quantitative analytics, we determine intrinsic value by examining book value, liquidation value and discounts to relevant ratios. We analyze cash flows and tangible assets and determine optimal buy points for the stock, affording downside protection. On the upside, we analyze a company's business strategy, operations and management, its potential for cash flow and revenue growth and margin expansion, and identify catalysts that can stimulate future growth and change market perception.
Losch Management invests only in the companies that meet its exceptionally high standards (typically less than 15 companies out of a universe of thousands of small- and mid-cap public companies). We accumulate shares carefully so as not to disrupt normal trading patterns. Once invested, we keep a close watch on the company’s management and operations to see if the company is meeting our expectations. We attend industry trade shows and talk to management, competitors and customers as part of our ongoing due diligence. Our target-holding period is typically 3 years to five Years, but can run longer. Holding periods may be shorter for tax-exempt accounts.
Losch Management's conservative investment style invests in companies with strong balance sheets, high cash flow and salable tangible assets provides additional downside protection. Buying stocks with promising earnings and revenue growth early in up trends provides protection against volatile market swings. Buying promising companies before they are large, enough to attract Wall Street coverage offers another risk management benefit. Losch Management also manages risk by diversifying its concentrated holdings in uncorrelated sectors and industries and employing sophisticated hedging techniques if necessary.