Cobia seeks to invest in overlooked and mispriced assets with positive catalysts to cause revaluation by the market. Focused on small cap technology companies, primarily in the U.S., Canada, and Western Europe, Cobia believes that deep understanding of company fundamentals provides the confidence and conviction to make concentrated investments. The Fund takes a multi-layered view including macro, industry, and company considerations to determine appropriate target valuations for investments. Cobia maintains a discipline of analyzing both upside and downside scenarios for all investment candidates. Long investments are made in companies with significant revenue and earnings growth potential not yet recognized by the market. Short investments are made in companies whose business prospects and / or current financial strength do not support market valuation. Both longs and shorts are considered as stand-alone alpha generators.
Cobia examines the investible small cap technology universe for optimal risk / reward opportunities. Idea generation is a function of proprietary screens that whittle the investment universe down to companies currently maintaining attractive valuations; management teams from current and past investments who provide new ideas to look at in their sectors; trade shows which provide an opportunity to network with engineers and salespeople and garner new investment ideas; and brokerage conferences and discussions with hedge fund peers. Once a potential investment is identified, Cobia undertakes a comprehensive research process that includes extensive field research. This process combines a strong relationship with management with third party checks including speaking to customers, competitors, suppliers, and distributors to gain a better understanding of a company’s products and their competitive edge. Key criteria for investment include sizeable revenue and EPS growth prospects, and foreseeable catalysts. Inexpensive valuation is a requirement for all investments, and provides a significant margin of safety on individual stock picks.