Fundamental Research
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Fundamental Research

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STEP BY STEP

Kings Point Capital Management employs a bottoms-up, fundamental research process to select securities for portfolios we manage.

Equity Research Process

  • Screening

    Quantitative screening for potential companies using metrics such as free cash flow and return on invested capital (ROIC) as well as various valuation metrics.

  • Management Access

    We frequently meet with the top management of the companies we have purchased or are in the process of vetting for portfolio inclusion.

  • Financial Analysis

    Internal modeling and industry knowledge, coupled with Wall Street research are
    used to determine investment candidates.

  • Investment Commitee

    Our Investment Committee continually monitors and oversees our portfolio selection.

  • Direct Shareholder Return (DSR)

    DSR is an internal, proprietary research metric used to identify management teams that use free cash flow (FCF) in ways that benefit shareholders.

Equity Research Principles

We seek companies with the following characteristics:

Superior Management

Management is sensitive to shareholder interests. This should be well defined by management to its shareholder base. Management should be able to define established benchmarks toward long-term growth.

Industry Dominance

Management must demonstrate the ability to maintain or improve product or service dominance over long periods of time.

Superior ROIC

Companies should generate a superior return on invested capital over their cost of capital and have a proven record of re-deploying excess cash flow into high return assets or return it to shareholders. In essence, companies must possess many of the characteristics of positive economic value added (EVA).

Attractive Valuation

Companies can be generally classified as GARP (Growth at a Reasonable Price) type equities.

Fixed Income Research Process

Kings Point Capital Management manages fixed income by purchasing individual bonds rather than owning bond mutual funds or ETF’s.

  • Screening

    Quantitative analysis of corporate and government debt based on interest coverage ratio, callable structure and credit quality.

  • Selection

    Maintain discipline of quality over yield to avoid unnecessary risks.

  • Customization

    Each portfolio is tailored to client’s specific risk parameters, income requirements and duration target.

  • Sourcing

    Utilize bond dealer relationships for competitive pricing.

  • Monitoring

    All positions are regularly reviewed for credit changes, duration extensions and overall debt structures of underlying issuers.