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Investment Philosophy
Investment Philosophy of Wasatch Advisors:
Earnings growth drives stock prices. Wasatch invests in
smaller companies because we believe they can grow faster, for longer than
large companies.
While there is no doubt that other factors influence stock prices, it has been
our experience that if we invest in companies that produce strong earnings
growth while paying attention to valuation, performance will take care of
itself.
The Wasatch Micro Cap, Small Cap Growth, Core Growth and Ultra Growth
portfolios focus on investing in what we believe are “America’s Best Growth
Companies” (ABGCs).* The Wasatch International Growth Fund focuses on investing
in what we believe are the “World’s Best Growth Companies” (WBGCs).** The
Wasatch Small Cap Value portfolio strives to invest in companies that we
believe are temporarily undervalued, but have significant potential for stock
price appreciation.
*ABGCs are companies that we believe possess an identifiable, sustainable
competitive advantage, are underfollowed, undervalued, well-managed and have
the potential to double in size within five years.
**WBGCs are companies outside the United States that we believe possess an
identifiable, sustainable competitive advantage, are well-managed, undervalued
and are producing above average earnings growth relative to their industry and
country of origin.
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