Fundamental Analysis – Sampling from the Quantitative Model

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Fundamental Analysis – Sampling from the Quantitative Model

Given the behavioral anomalies and inefficiencies that we believe in, our fundamental analysts apply traditional, but focused, skills as they choose and monitor portfolio investments. Instead of creating better forecasts of corporate profitability (relative to Wall Street sell-side or other buy-side analysts), 361’s analysts strive to profit from changing expectations, ‘unexpected’ earnings surprises, systematic forecasting errors made by Wall Street analysts, and underreaction to current information. In particular, we focuses on earnings persistence and the core drivers of earnings surprises and estimate revisions…with the goal of identifying companies that possess attractive economic characteristics, return drivers, and accounting methods. Additionally, our analysts leverage their awareness of behavioral finance (and the many biases and heuristics that drive investor decisions) to profit from investors’ reaction and underreaction to data, including information associated with positive events predicted by 361 Capital’s quantitative models.

  • Sources of Return

    "Our process attempts to add alpha through stock selection, rather than sector “bets” against the benchmark. Thus, we have established a target number of positions for each of the sectors included in our universe."