For portfolio managers seeking high-impact ideas. 
This alpha generation strategy identifies companies poised to deliver exceptional returns, catering to portfolio managers seeking firms positioned for outstanding, above-average profitability amidst evolving market dynamics. These companies typically exhibit a strong commitment to securing a substantial portion of industry profits, as evidenced by bold capital allocation strategies. This strategy identifies firms with significant growth potential but requires a temperament for navigating investments in companies with higher risks.

The Spirited-Alpha Growth Ideas Strategy

Even companies with negative current profitability can make it to our shortlists. The focus is on the outlook for incremental value creation (I-EVA), which should show strong trends. As a Spirited-Alpha strategy, stocks are also chosen for their lengthy implied competitive advantage period, requiring investors to tolerate high-duration risks. In other words, a big chunk of the stock’s valuation is contingent on future cash flow generation. Additionally, the strategy pursued by management is likely to be expansionary, signaling a commitment to strategic, growth-oriented capital allocation decisions. However, it seeks out stocks with moderate or low embedded expectations to balance the price paid and the potential upside to returns.
.

The Spirited-Alpha Growth Ideas Strategy stock selection criteria:

• Strong Forecast Incremental Value Creation (I-EVA)
  The promise of robust forecast incremental value creation. Even companies with negative current profitability can make it to this short list.
• Lengthy Implied Competitive Advantage (I-CAP)
  Companies enjoy a lengthy competitive advantage, indicating confidence in future profitability and tolerance for duration risk.
• Expansionary Capital Allocation Strategy
  An expansionary management capital allocation strategy demonstrates confidence in their future and potential for continued I-EVA acceleration.
• Moderate Embedded Expectations
  Companies with low embedded expectations are favored, as they indicate the absence of exuberance in share prices.