Process

A Big Universe of Small Cap Companies

Global Alpha considers its universe to be the over 4,500 small cap companies in the MSCI World Small Cap Index. Quantitative screenings and qualitative research are used to identify what companies to buy, when to buy them and when to sell.

Knowing What to Buy

Quantitative screenings on measures including profitability, revenue growth and balance sheet strength help narrow the universe. Through fundamental analysis and management interviews, companies with features such as dominant market share, sustainable competitive advantage and clearly defined growth strategies are identified for further analysis.

Knowing When to Buy

In determining whether a good company is also a good investment opportunity, Global Alpha identifies stocks trading at a significant discount to intrinsic value along with the catalysts expected to drive realization of their true value. From their best investment ideas, portfolios of 40-60 stocks are constructed.

Knowing When to Sell

Critical to realizing and protecting accumulated gains is knowing when a security should be sold. Global Alpha maintains the purity of its small cap portfolios by adhering to a strong sell discipline. Positions may be sold if: a company’s market capitalization exceeds $5 billion; there is a change in strategy, a loss of competitive advantage or an excessive valuation; or a better investment opportunity is identified.