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Rocket Capital Management

Our Process

Our goal is to use our disciplined and repeatable process to identify and own the best small cap growth companies in the best growth sectors of the economy.

It All Begins With the Charts

Each week begins by analyzing more than 1,000 chart patterns.

This process allows us to identify:

  • The health of the overall market

  • Sectors that are emerging as market leaders

  • Early stages of momentum in individual stocks

Narrowing the List

Out of more than 1,000 stocks, we narrow the list down to roughly 100 names which:

  • Show strong technicals - i.e. price and volume data showing that buyers are winning the battle

  • Have superior revenue and/or earnings growth

  • Are in strong and fast growing sectors which are likely to benefit from strong secular uptrends for the foreseeable future

Fundamental Overlay: The Final Test

We use proprietary and sell-side research to assess fundamental strength, utilizing the "Rocket" process:

                      R - Revenue & Earnings Growth

                                  Rapid Growth

          O - Obvious Leader

                                                  Leader in its category

          C - Competition

                                                 Companies that have a competitive edge

          K - Keep it Small

                                                 Smaller stocks provide greater upside potential

          E - Economics

                                                Look for growing institutional ownership to drive demand for the stock

            T - Technical Analysis

                                                Let market action tell you when to buy and when to sell

Our Process Leaves us With:

  1. A portfolio of stocks which we believe have the best growth prospects and are backed by strong technicals and fundamentals

  2. A watchlist of stocks which have strong traits, but need to improve either technically or fundamentally before being added to the portfolio

  3. A strong idea of broad market and sector trends

The Ongoing Process

We continually monitor the portfolio holdings, and sell when:

•A stock becomes overextended technically or breaks down

•A stock becomes an outsized holding or trades to an exuberant growth premium

•A stock severely underperforms peers, i.e. we chose the wrong stock

Each week we review the charts to gather new insights on changing market trends and new sector leaders.

We identify new stocks to consider as additions to either the portfolio or the watchlist.

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