Philosophy & Process

PHILOSOPHY

Simms Capital Management, Inc. seeks high quality growth stocks with sustainable earnings growth.  Our process is designed to invest in companies with relatively high returns on equity and high earnings growth rates, not companies or industries that have predominantly cyclical characteristics.  SCM only invests in companies with expected positive earnings.  SCM does not deviate from its investment philosophy by adhering to a clearly defined buy and sell discipline.

PROCESS

SCM utilizes a disciplined quantitative and fundamental bottom-up stock selection process that identifies attractive equities globally.  This process is consistent across all borders and currencies and is basic to the creation of a portfolio with growth characteristics and excess returns over time.
Our proprietary three-step investment process is a series of eleven valuation disciplines and screens that rank securities from a database of 6,600 global equity securities.  The modeling process uses quantitative factors such as a dividend discount model, earnings momentum, liquidity, and the demand and supply of shares.
The ranking procedure creates an overall score for each security and produces a list of the 130+ most attractive securities.  Fundamental analysis is then applied to the most attractive securities to create the  portfolio.
 
Each component of the selection process is assigned a decile ranking and is combined in the quantitative screening model to create an overall score for each security.  This weekly process produces the "Universe" of the 130+ most attractive securities.   After the universe is produced, rigorous fundamental analysis is applied.