Broker Check

Investment Advice for Institutional and Individual Investors

Process

  • Step 1: Generate Investment Ideas
  • Step 2: Research Securities
  • Step 3: Conduct Fundamental Analysis
  • Step 4: Sell Discipline

 

GENERATE INVESTMENT IDEAS:

Initially Sparrow screens databases (Value Line, Zacks, and Reuters) for industries and companies that show consistent earnings power over multiple economic cycles.

Research Securities:

Stocks are then scored using a proprietary matrix of various fundamental, quantitative, and technical factors. Some of these factors include:

  • Above average earnings per share growth rates
  • Above average return on equity
  • Excess free cash flow
  • Low debt to equity
  • Shareholder friendly management
  • High margin of safety

CONDUCT FUNDAMENTAL ANALYSIS:

We review the company's original source material such as quarterly and annual reports; participate in quarterly conference calls and web casts; read independent analyst reports from Value line, Zacks and Reuters; determine intrinsic value, margin of safety and best time to buy based on trading patterns.

SELL DISCIPLINE:

We sell when the original reason we bought the company no longer exists or when extreme overvaluations occur on a case by case basis.

 

RESEARCH SERVICES USED

  1. Valueline, Reuters, Securities Research Company, and Zacks among others.
  2. Monthly company webcast conference calls.
  3. Street Research - Goldman Sachs and others.
  4. Federal Reserve Data.