Cornerstone seeks long term growth of capital for its clients through the opportunistic selection of stocks expected to appreciate at a faster rate than the benchmark. These stocks are evaluated based on a variety of key factors where our research identifies a "perception gap" (an underappreciated opportunity for growth in one or more of those key factors).
Stock selection is further based on the fundamentals of revenue, earnings, cash flow, and management depth and credibility. Sector allocation is a by-product of individual stock selection. Stocks will generally be selected from those which are primarily traded on US exchanges or markets.
The goal of the strategy is to generate alpha over the long term by purchasing high growth companies where our research has identified one or more perception gaps.
Alpha: A measure of performance on a risk-adjusted basis. Alpha takes the volatility (price risk) of a mutual fund and compares its risk-adjusted performance to a benchmark index. The excess return of the fund relative to the return of the benchmark index is a fund's alpha.
Cash flow: The amount of net cash generated by an investment or a business during a specific period.