How is it that a boutique portfolio manager from the quiet, beautiful coast of South Carolina has crushed the S&P 500 by an average of +5.95% since 2011? The Pawleys Growth Fund seeks to identify companies with low debt:equity ratios, strong earnings per-share growth, and solid cash-flow. The Pawleys Growth Fund typically holds 20-25 long positions at any given time. Why is this concentration of the portfolio important and how does it relate to the stunning eight buy-outs?

We use a strict, systematic selection process to identify growth-oriented companies that are reasonably priced. This non-emotional approach to investing is designed to beat the averages by holding best-in-breed companies across different sectors, and taking high-conviction positions. Index mutual funds and exchange-traded funds are riddled with mediocre stocks. As of this writing, there are 300 companies in the S&P 500 with earnings growth below 15%, and only 45 that exceed 25%. Why would anyone invest in a company that has shrinking earnings and gradually fading relevance? Anyone who invests in a tracker fund unknowingly owns these poor performers. Let’s review the returns that we have achieved for our investors over the past few years with the buy-outs:

Does the average premium gain for our investors of 43% for these eight companies get your attention? It should. This is a remarkable accomplishment, and speaks to the power of our stock selection process. The Pawleys Growth Fund is for investors looking for a repetitive portfolio process that takes calculated risks. Join us in the pursuit of beating the averages with wickedly smart investing!

© 2017 Pawleys Capital Management, LLC. All rights reserved. Total return figures are gross of fees which vary. Earnings figures are trailing 5-year earnings per share growth rates. Source S&P.