Wasatch Ultra Growth Fund® (WAMCX)  Invest in this Fund 

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Landscape

The Ultra Growth Fund is an aggressive, high-growth portfolio.

What is this fund's objective?

The Ultra Growth Fund is an aggressive, high-growth small cap portfolio. The fund targets rapidly growing companies in fast-growing sectors of the economy. While growth is the primary objective, income is a secondary objective when it is consistent with long-term growth of capital. Currently, we do not expect the fund to generate substantial income.

What kind of companies does this fund hold?

Portfolio Manager John Malooly  seeks out rapidly growing companies. We analyze high growth companies, they are most interested in finding:
  • Potential for high revenue and earnings growth
  • Experienced, proven management team
  • Sustainable competitive advantage
  • Market leadership and/or growing market share
  • Ability to capitalize on favorable long-term trends
  • Strong cash flow
  • Reasonable use of debt
  • Sound financial controls

How do we find them?

We use a bottom-up process of fundamental analysis to look for individual companies that we believe are high-quality, and have the potential to grow earnings rapidly. To determine that a company has these characteristics we take the following approach:

Screening
Using financial databases, he screens for companies demonstrating high-quality growth numbers. He typically looks for:

  • High or accelerating earnings growth
  • Rising return on assets (ROA) trends
  • High absolute levels of ROA vs. historical and peers
  • Accelerating revenues
  • Improving cash flows
  • Positive inflections in income statement or balance sheet metrics

Deep Due Diligence
We use a thorough and collaborative process to understand the companies in which we invest.  We study the company, its competitors, and its industry.  We talk with management to verify the quality of the leadership and gain deeper insight for the company’s prospects and risks.  We call competitors, suppliers, and customers to make sure we have a complete picture of the landscape.  Meanwhile, we are constantly talking with other Wasatch portfolio managers and analysts in order to leverage the knowledge, perspective, and insight of the broader Wasatch team in every investment decision.

Earnings Models
We build proprietary earnings models in order to analyze a company’s key growth drivers. Our models help shape our projections of a company’s potential for earnings growth and what we believe to be a fair price for the stock.

Valuation                                              
We consider a variety of appropriate valuation metrics (e.g. Price to Earnings, Enterprise Value to EBITDA, Price to Book, etc.) to assess the potential return and the risk/reward trade-off of each stock.  Valuation is an important component of every investment decision.

Investing in small or micro cap funds will be more volatile and loss of principal could be greater than investing in large cap or more diversified funds.

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