Investment Philosophy

Blue Shores (BSC) believes the greatest opportunity for an active investment manager to add value versus the passive index alternative is to operate a portfolio free of capitalization restrictions, thus allowing the best investment opportunities to be included in a portfolio regardless of company size.

BSC typically utilizes a discounted cash flow approach to value equity investments in client portfolios. Our team compares its own estimated value of select businesses versus the value they are trading at in the public markets. BSC generally purchases businesses that are trading at a discount to what BSC believes they are actually worth. Companies are typically sold when they are trading near or above BSC's fair value estimate. This may be a result of price appreciation or a reduction in BSC's fair value estimate based upon revised cash flow forecasts or cost of capital estimates.

Blue Shores has three investment styles that all use the same valuation approach, but focus on different company characteristics. The growth style focuses on companies with high levels of profitability and earning growth potential, whereas the value style focuses on companies with low relative valuations and improving fundamentals. The international approach focuses on leading companies with large amounts of cash flow and high dividend yields.  The Global and U.S. Core strategies combine these different approaches into one coherent portfolio.  Global macroeconomic themes are continuously taken into account to adjust portfolio positioning and market exposure.  Often times, Blue Shores hedges a portion of clients' long-term equity holdings with synthetic short positions to help protect the portfolio from downside loss.  Hedging typically occurs when cyclical market risk is viewed as high by the portfolio management team.