Our Investment Philosophy

Monarch Partners’ Investment Philosophy is based on Value Discipline, Focused Internal Research and Risk Aversion.

• We identify undervalued companies that possess catalysts that will enhance shareholder value. We avoid value traps.
• Our research is performed by a dedicated, experienced research team. Our bottom up process is 90% fundamental and 10% quantitative.
• Risk aversion includes diversification, daily monitoring of portfolio exposures, and a strict sell discipline.

Just as important, Monarch Partners has a committed sell discipline. We sell stocks when:

• Full value appreciation to target price occurs
• Business Fundamentals deteriorate
• Identified Catalysts reverse
• Downside Risk is assessed daily

As mentioned above, Risk Aversion is a main tenet of our Investment Philosophy. Risk Aversion to Monarch Partners means:

• Diversification (25-110 stocks, depending upon the strategy)
• Maximum position size of less than 5% of the outstanding shares of a portfolio company; 10% for Concentrated Value Equity
• Sector weightings at +/- 10% of the Russell Index
• Minimal cash

Our Process

Monarch Partners’ Investment Process is a disciplined process designed for long term success. It begins with a quantitative screening process that is used to review the current holdings and identify candidates for the portfolio. At a formal investment meeting, the current portfolio is reviewed, adjusting target prices based on the latest information and then distributing new ideas to the analyst team. From there, the analysts spend the better part of the next few days reviewing the company’s financial statements, speaking with company management and identifying whether there is a catalyst for enhancing shareholder value. When complete, the analyst presents his/her findings to the portfolio manager.