Phone: 812-376-9444
Toll Free: 800-808-9444

Philosophy & Process

Philosophy

Kirr, Marbach & Company believes that companies with above average growth prospects and below average valuations offer the highest potential for superior long-term performance. We seek to have a competitive advantage by focusing on the inefficiencies created by corporate restructurings and special situations. We have taken a consistent, disciplined approach that is time-tested and repeatable.

Idea Generation

Investment Philosophy Graphic

Investment Process

Analytics– we look at numerous things including:

Compelling Valuation
- Price/Earnings
- Price/Sales
- Price/Private Market Value
- Enterprise Value/Free Cash Flow
Effective/Ethical Management
- Integrity and Compentency
- Ownership of Stock
- Building Shareholder Value
Strong Financials
- Leverage
- Returns on Invested Capital
- Free Cash Flow Generation
- External Financing Needs
Market Inefficiencies
- Limited Wall Street Recognition
- Out of Favor for short-term reasons
Decision Making
- 2:1 Upside to Downside Ratio
- Probability of successful outcome
- Cash availability
- Relative attractiveness of other stocks in the portfolio
Catalysts
 

Portfolio Construction

  • 35-45 holdings
  • Targets starting positions of 2-3%
  • Turnover averages 25 to 35% annually
  • Bottom-up approach with little regard for index weighting

Risk Monitoring

  • No individual issue exceeds 6%
  • No sector exceeds 30%
  • Proprietary EXPROR constantly monitors expected upside and downside

Sell Discipline

  • Sell position when the price target is achieved
  • Sell the position if there are better opportunities
  • Sell position if the catalyst fails
  • Reduce positions when fundamentals falter, but catalyst is intact
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