Research
Wisconsin Capital Management’s team of analysts conducts proprietary research using
a thorough independent hands-on approach. The goal is to find companies which we
believe are likely to perform well under current economic conditions over the complete
business cycle. We study companies through an historical context as well as a forward-looking
approach, looking for quality companies we can purchase at a reasonable price.
As we look for prospective companies, we focus on their
- financial strength
- cash flows, and
- earnings expectations
We are constantly striving to advance our fundamental research. Over the last several
years, our deeper investigation of the business balance sheet has paid off. Likewise,
we continue to focus on how companies are funded, as we have noted the dangers of
leverage in recent years. Overall, a strong balance sheet equals flexibility. We
believe outside capital can be expensive and unreliable. Moreover, companies with
strong cash generation will have a lower cost of capital and better opportunities
for growth.
Our fixed income or bond portfolio benefits from the same research focus we apply
to our stock holdings. We own bonds for principal protection, current income, and
to dampen the volatility of the overall market. We continue to evaluate our bond
portfolios for potential pitfalls, as delinquencies rise and credit markets continue
to shift.
Currently, our fixed income investment focus is in high quality bonds, with shorter
maturities to protect from the effect of rising rates on existing bond portfolios.
This approach should have us well-positioned to take advantage of higher yields
when better opportunities resurface in fixed income.