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The Hartwell Process
"Effective portfolio management
goes beyond simply assembling a random selection of ‘good’
growth stocks."
- Adrian S. Dawes
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| Quantitative
Screens Applied to Growth Universe |
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Qualitative
Analysis: Hartwell Growth Universe
250-300 Companies |
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Extensive
Fundamental Research
50 Companies |
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Portfolio
Construction |
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15%
or greater
EPS growth |
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#1 or #2
Industry
Positions |
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Proprietary
Technology |
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Buy/sell Discipline |
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High
Sales
Growth |
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Expanding
Returns on
Invested Capital |
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Competitive
Products
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Valuation |
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Strong
Financials |
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High Earnings
Visibility |
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Recurring
Revenue |
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Investment
Rationale |
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Insider
Ownership |
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We begin by using quantitative screens across the growth universe
to find companies that meet Hartwell’s growth criteria:
- Above average EPS growth
- High sales growth
- Strong financials
- Insider ownership
Because stocks that do not fit the Hartwell
criteria do not distract our investment professionals, we are able
to concentrate in depth on a select group of premiere growth companies.
We then apply a qualitative analysis of the companies within our
universe by looking for companies that have:
- #1 or #2 industry position
- Expanding return on invested capital
- High earnings visibility
Hartwell managers then use extensive proprietary
research to find companies with:
- Proprietary technology
- Competitive products
- Recurring revenue
Once the companies have been identified by
our portfolio managers and analysts, we rigorously adhere to our risk
management disciplines and constantly review our:
- Buy / sell disciplines
- Valuation parameters
- Investment rationale
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