SMID Growth Strategy

Century’s SMID Growth strategy focuses primarily on service-based companies that have return-on-equity (ROE) and book value growth >15% and a high degree of recurring income. The strategy operates on the thesis that capital markets, especially small and mid cap companies, are inefficiently priced and that in-house fundamental research can identify companies that will grow faster than the overall market. Stock selection is bottom-up focusing on companies with improving profit margins, conservative accounting practices and a high predictability of earnings increases and that are reasonably priced. Purchases generally range from $500 to $2 billion in market cap. The average weighted market cap of the SMID Growth strategy is comparable to the Russell 2500 Growth index.

The sector focus is on Consumer Discretionary, Financials, Healthcare and Technology. This is an active strategy with both sector and industry over-weights and under-weights.   We describe our strategy as “consistent growth.” Consultants typically describe Century’s strategy as SMID GARP (Growth at a Reasonable Price).  

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