Growth Equity Strategy

Philosophy

In any free market society, there will be an unyielding drive for innovation. Whether it be new ways to communicate, buy and sell goods without leaving home, or diagnose and treat illnesses in a faster and safer manner, a better alternative is always around the corner. MCM’s Growth Equity Strategy seeks to look around that corner to identify the market leaders of tomorrow.

Process

The Mitchell Capital Growth strategy seeks to own shares of high-quality companies with a distinct competitive advantage that will allow the company to generate above average returns on capital with long runways for growth. We avoid investing in fads or manias where the market tends to overreact and subsequently overvalue businesses that are exposed to a theme that will not fit the long-term nature of the portfolio.

The challenge of growth investing has historically been “overpaying” for a business growing rapidly. We look to mitigate exposure to overvaluation by waiting for opportunities where valuations have come down due to softness in the marketplace or some kind of short-term issue within the company itself. Our willingness to wait for these opportunities allows us to own the best companies at reasonable prices.

We also typically limit exposure to companies that don’t generate Free Cash Flow or aren’t on the
precipice of doing so. This helps mitigate exposure to businesses with murky futures, reliant on the
capital markets for funding.

The typical holding period for companies in the growth strategy is much longer than with other strategies as it can take many years for growth prospects to fully mature. We depend on our convictions through all levels of market volatility and often use that volatility to our advantage.

We invest in all market cap sizes as this allows us to take advantage of inefficiencies across the full
market. Given our high convictions, we typically run a concentrated portfolio that is more heavily weighted to those companies identified as having larger upside.

We complement our intensive use of fundamental analysis by implementing technical analysis to
optimize our entry and exit points. Because market conditions are constantly changing and companies will fall in and out of favor, we monitor holdings on a daily basis in effort to preempt any weakness in the portfolio.

Team

Jonn Wullschleger, CFA

Rob Day

Miles Green, CFA

Grant LacKamp, CAIA

Other Equity Strategies

Fixed Income Strategies

Growth Equity Strategy: March 31, 2024

Top Ten Holdings

PositionAllocation %
MICROSOFT CORP12.0
NVIDIA CORP9.2
APPLE INC8.8
ALPHABET INC-CL C7.6
AMAZON.COM INC6.5
META PLATFORMS INC-CLASS A4.5
BROADCOM INC3.9
CAVA GROUP INC3.2
ELI LILLY & CO2.9
VISA INC-CLASS A SHARES2.7

‏‏‎The information above is intended solely to provide insight into how the manager analyzes securities, and are not a recommendation for any particular security or strategy. There is no assurance securities will remain in the portfolio or that they were or will be profitable. This is a list of top ten holdings based on a percent of the total and is not a full list of securities.

Strategy Characteristics

CharacteristicPortfolio
Forward Price to Earnings (P/E) Ratio39.9x
Past 5-Yr Average EPS Growth Rate84.7%
Price to Future Earnings Growth (PEG) Ratio1.5x
Free Cash Flow Yield2.0%
Net Debt to EBITDA0.6x
Median Market Cap ($Billion)157

Sector Weightings

SectorPortfolio %
Information Technology43.2
Consumer Discretionary14.1
Communication Services12.1
Health Care9.9
Cash6.7
Industrials6.5
Financials3.8
Consumer Staples1.9
Energy1.6
Materials0.0
Real Estate0.0
Utilities0.0

About Mitchell Capital Management

Mitchell Capital Management (MCM) was founded in 1987 and is an SEC Registered Investment Advisor. The firm manages portfolios and provides investment solutions for an array of investors nationwide, including individuals, foundations, union pension plans, retirement plans, endowments and associations. MCM has always been employee owned and intends to stay that way. Our fiduciary culture means our clients are the first priority in each decision we make.

Disclosure: https://mitchcap1.wpengine.com/disclosure/