Tygh Capital believes that stock prices follow earnings over the long term. The firm uses fundamental research to identify companies that meet the following criteria:
A minimum of 15% revenue and earnings growth potential for at least the next two years;
Sustainable valuations from the time of purchase; and
At least 20% upside to price target over a 12 month time horizon.
Intensive bottom-up fundamental research focusing on sustainable growth and superior cash flow generation drives stock selection. Tygh believes a portfolio made up of stocks with these characteristics is most likely to generate excess returns over a full market cycle.