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The team at Global Alpha believes the key to generating consistent added value for clients over time is by creating portfolios from the bottom up using a global thematic perspective and a risk-controlled, low turnover approach.

Active Management in an Inefficient Market

Research and analysis on smaller companies is often limited or not widely communicated, leading to the mispricing of such companies’ securities. At Global Alpha we believe this inefficiency creates fertile ground for uncovering companies with unrecognized growth, accelerating earnings, strong balance sheets and significant management ownership. Our investment team combines a bottom-up, research-based approach together with consideration of global themes to build conviction-based portfolios intended to produce sustainable added value.

Bottom-up Fundamental Stock Selection

We focus on adding value through careful stock selection. Our bottom-up fundamental approach combines with management interviews to identify companies with features such as sustainable competitive advantage, clearly defined growth strategies, and a strong balance sheet. Detailed financial analysis is conducted to determine whether a good company is also a good investment opportunity. Discounted cash flow analysis is used to identify stocks that are trading at a significant discount to intrinsic value along with the catalysts expected to drive realization to their true value.

Exploiting Investment Themes

We structure portfolios around distinct investment themes that identify the major long-term cyclical and structural influences in world economies and stock markets. Investing in companies expected to benefit from social, economic, industrial or demographic trends increases our ability to outperform benchmarks over time.

Balancing Concentration and Diversification

We believe that concentrated portfolios, typically 50-70 stocks focused on our highest conviction investment opportunities, maximize our opportunity to generate added value. However, diversification and effective risk management are also critical. Portfolios are typically built around 4-5 secular themes while a smaller number of attractive, bottom-up secular and cyclical companies are included for both return potential and risk mitigation. A comprehensive risk management framework aides the effective management of stock-specific risk.

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