Our Process
A forensic, research-intensive investment process built to identify undervalued companies—and, where possible, to work alongside their leadership to realize that value for all shareholders.
How We Find Opportunities
We look for companies that are worth more than the market believes—and we use forensic financial analysis to understand why the gap exists. Our sourcing process begins with a systematic review of public filings—10-Ks, 10-Qs, proxy statements, and earnings transcripts—through an analytical lens developed over a decade of identifying the accounting choices, disclosure gaps, and governance shortcomings that cause public companies to trade below their intrinsic value. Many of these are good businesses with solvable problems. That is where we focus.
Forensic Financial Screening
We apply proprietary analytical frameworks rooted in U.S. GAAP, IFRS, and SEC reporting requirements to identify companies where reported financials may diverge from underlying economic reality—whether due to conservative accounting choices that suppress reported earnings, aggressive practices that obscure risk, disclosure gaps that prevent investors from seeing the full picture, or, in some cases, outright misstatement. Our interest is not in the label, but in the magnitude of the divergence and the opportunity it creates.
Professional History Tracking
We systematically track the professional histories of corporate officers, directors, and audit professionals whose prior affiliations have intersected with material accounting failures, regulatory enforcement actions, or significant financial restatements. When these individuals assume new roles at public companies, we treat that as a signal warranting closer examination—not a presumption of wrongdoing, but a data-informed starting point for forensic analysis. This institutional knowledge deepens with every engagement we complete, creating a compounding analytical advantage that is difficult to replicate.
Regulatory and Governance Analysis
We evaluate each company’s compliance posture across securities laws, exchange listing standards, and corporate governance obligations. Our analysis extends to board composition, executive compensation alignment, related-party transactions, and the quality of audit committee oversight. Companies with strong governance foundations often need only targeted improvements to unlock meaningful value. Companies with deeper structural issues require a different approach—but in either case, our analysis begins with a clear-eyed assessment, not an assumption.
Management Credibility Assessment
We systematically compare forward-looking management commentary—in earnings calls, investor presentations, and regulatory filings—against observable financial trends and industry benchmarks. Persistent divergence between what leadership communicates and what the numbers show is among the most reliable indicators of mispricing, and among the least systematically exploited by traditional fundamental managers. This analysis also helps us assess whether a management team is likely to be a constructive partner in value creation—a factor that directly shapes how we approach each investment.
Building Conviction
Identifying a potential opportunity is only the beginning. Before any capital is deployed, every thesis undergoes a structured diligence process designed to pressure-test our conclusions, quantify the range of outcomes, and define the conditions under which we would be wrong.
Deep Fundamental Research
Beyond the forensic layer, we conduct rigorous analysis of the company’s competitive position, industry dynamics, capital structure, and intrinsic value. We build detailed financial models that account for multiple scenarios, stress-testing our assumptions against historical performance, peer comparisons, and independent data sources. Our objective is to understand not just what a company is worth today, but what it could be worth under improved stewardship.
Legal and Regulatory Framework
For each investment, we map the applicable accounting standards, securities regulations, and governance requirements that are relevant to our thesis. This ensures that our analysis is grounded not just in financial opinion, but in the specific legal and regulatory obligations the company is subject to—and the consequences of non-compliance. This framework also informs how we engage: understanding the regulatory landscape helps us guide companies toward compliance in a way that is practical and value-accretive, rather than punitive.
Catalyst Identification
We identify specific events or actions that we believe will cause the market to reprice the security toward its intrinsic value. Catalysts may include upcoming regulatory filings, earnings cycles, audit rotations, pending litigation outcomes, scheduled governance events, or our own constructive engagement with the company. Every position requires an identifiable path to value realization—whether through external developments, direct partnership with management, or both.
Portfolio Construction and Risk Management
We manage a concentrated, long-oriented portfolio where every position reflects a high-conviction thesis supported by forensic analysis. Our preference is to invest in companies where we believe value can be created or unlocked—and where we see a realistic path to working with, not against, the people running the business. While our portfolio maintains a long bias, we may establish short positions in situations where our forensic analysis identifies material overvaluation driven by accounting misrepresentation or undisclosed liabilities.
Position Sizing
Each position is sized according to the strength of the underlying thesis, the magnitude of the identified mispricing, the clarity of the catalyst, and the risk of permanent capital loss. Higher-conviction opportunities with clearly defined catalysts and limited downside receive larger allocations.
Ongoing Monitoring
Every position is subject to continuous reassessment. We track thesis validation through subsequent filings, management actions, regulatory developments, and market behavior. Positions are adjusted or exited when the original thesis is fulfilled, disproven, or when the risk-reward profile changes materially.
Downside Protection
We define risk as permanent loss of capital, not short-term price volatility. By identifying and quantifying accounting and disclosure risks before the market does, we are able to price those risks into our entry point and define our downside with specificity. We invest only when we believe the risk-adjusted return—accounting for the full range of outcomes, including the possibility that our thesis is wrong—is compelling.
From Analysis to Action
Our investment process is designed to create value. How we pursue that value depends on what our analysis reveals and how a company's leadership responds.
Constructive Engagement
In every case, our first instinct is to engage privately and collaboratively. Many of the accounting, disclosure, and governance issues we identify are correctable—and companies that address them proactively stand to benefit from improved investor confidence, reduced regulatory risk, and a more accurate market valuation. We approach management teams and boards with detailed, well-researched perspectives and a genuine willingness to work together toward outcomes that serve all shareholders. The majority of our engagements begin—and, ideally, end—at this stage.
Escalation When Necessary
When constructive engagement is met with inaction, dismissal, or resistance—and when we believe shareholders are being harmed by a company’s refusal to address legitimate concerns—we are prepared to escalate. This may include public letters, shareholder proposals, director nominations, and proxy campaigns. We do not escalate for leverage or publicity. We escalate because, in some situations, it is the only way to protect the investors we serve.
Regulatory and Professional Referrals
In cases where our forensic analysis uncovers conduct that we believe may violate securities laws, accounting standards, or professional licensing obligations, we will refer those matters to the appropriate authorities—including the U.S. Securities and Exchange Commission, state regulatory bodies, and professional licensing boards. We take this step seriously and exercise it judiciously, but we do not hesitate when the evidence warrants it. Our track record includes referrals that have resulted in SEC enforcement actions and corrections to corporate disclosures, and we view this as an essential function of the work we do on behalf of investors.
"We would rather help a company fix a problem than fight about it. But when a board chooses to ignore what the numbers plainly show—and investors are paying the price—we will do whatever is required to protect them. Every time."
Our approach to constructive engagement, escalation, and the outcomes we have delivered for shareholders are detailed on our Investor Advocacy page.
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