Rigel’s philosophy is built on the belief that stock prices are driven by supply and demand, within which earnings are just one of several contributing factors. Experience shows that stock price changes lead information about fundamentals. As a result, our process is grounded by fundamentals, but is highly influenced by quantitative, technical and price/volume analyses.
Strict adherence to this philosophy and process has added value through 5 Bear markets including the recent Bear/Bull Market cycle. Our performance record shows that our process is both successful in a variety of market conditions and repeatable over time.
The key principles of our philosophy are:
Growth Oriented with a Difference
We seek to identify breakout stocks: those that may be less visible than other stocks, but with demonstrated strong growth characteristics in an industry with strong growth prospects.
We look for stocks that will likely contribute to the portfolio immediately and can continue to do so for 12 to 18 months.
Research Driven
When evaluating a stock, our aim is objectivity. We seldom interview company management. This enables us to not buy into a company’s marketing-spun strategic story, removing any obstacle to trimming or liquidating a stock when necessary. The availability of information and strict disclosure requirements result in a wealth of public information on companies’ past performance and projections.
Within our fundamental analyses, we emphasize objective data pertaining to a company’s growth (revenues and EPS), margins and returns (ROE), with a preference for unit volume driven market share gains.
Risk Adverse
Preservation of capital is the key to strong long-term performance.
Team Approach
Teams of Rigel employees are involved in all investment decision-making and implementation.
Our collaborative approach ensures that our time-tested process is executed consistently over time and through varying market conditions.
Investment Process
Rigel’s process is grounded in fundamentals and complemented by quantitative, technical and price/volume analysis. There are four key steps in Rigel’s investment process executed weekly and fine tuned daily as dictated by market conditions and new information:
- Quantitative screen
- Fundamental analysis
- Analysis in current market environment
- Selection of stocks for the portfolio
Quantitative Screen
Purpose: To narrow the universe to top 10% to 20% of companies
Rigel’s screen utilizes data from the last 52 weeks, with recent periods more heavily weighted. The screen is based on:
- Earning per share
- Sales, margin, ROE
- Industry strength
- Relative strength
- Price/volume
Fundamental Analysis
Purpose: To narrow the universe by determining the source, quality and sustainability of the growth based on current and projected information including:
- Industry trends
- Competitive position
- Consistency of growth
- Potential for acceleration
- Quality of earnings
Current Market Environment
Purpose: To identify stocks with the greatest potential within the current market environment.
Factors considered in this analysis include:
- Growth potential versus predictability of growth
- Embedded expectations of the market and the specific stock
- Market leadership within sectors and/or industry
- Market risk characteristics
- Cyclical and seasonal considerations
Your Portfolio
- Maximum initial position of 1.5% for large cap and all cap growth and 1.0% for small-mid cap growth
- Maximum position of 5%
- Affirmation of current holdings
- Identification of stocks to be added or trimmed
- Risk control considerations
