Bridgeport selects investments by identifying and screening for securities which are consistent with our value-oriented investment philosophy. We subscribe to a variety of independent investment services, newsletters, databases and publications. We use this information to screen for investments which meet certain financial criteria including high profit margins and returns on invested capital and low fundamental valuations.
After identifying an investment of interest, we gather all available public information on the company. We will usually contact and interview management to assess the quality of the company’s key personnel, financial results, business model and future prospects. Based on this information, we make a decision as to whether we are interested in becoming stakeholders in the company by making an investment. We will only invest, however, if the current market price of the security is significantly less than our estimate of intrinsic value such that there is a substantial margin of safety.
Often, we identify a company with attractive fundamentals that is fairly or overvalued. In these situations, we monitor the investment and potentially make a purchase at a later date if the price of the security declines relative to its fundamental value. Similarly, if an investment we hold becomes overpriced relative to its fundamental value, we will sell our position.