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Stock Selection
ICAP's stock selection process is a blend of quantitative and qualitative analysis. First, we screen our equity universe with rigorous proprietary models to identify stocks we believe offer the best relative values and avoid those companies that exhibit deteriorating earnings trends. By focusing on stocks with stable earnings prospects and reasonable valuations, our objective is to lessen investment risk and achieve superior returns.
Identify Catalysts
From the subset of quantitatively attractive candidates, we identify catalysts—events we believe will drive the stock's price higher.
These catalysts include:
> New products
> Management changes
> Corporate restructuring
> Macroeconomic or industry trends
Portfolio Construction
The final steps begin when stock recommendations are presented to the investment committee whose members challenge the recommendations to help determine whether the key components are in place.
Those components are:
> Strong relative value
> Stable earnings trends
> Identifiable catalyst
Then, the committee determines whether or not to add the stock to the portfolio or to monitor it for future purchase. This highly disciplined process helps ICAP construct a portfolio with the most compelling stocks.
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