OUR INVESTMENT APPROACH

• Regulation Full Disclosure restricted analysts' access to material non-public company information and therefore reduced their incentives to produce this information
• Sarbanes-Oxley inflicted costly compliance measures which were especially burdensome for smaller companies

Collectively, these policies have reduced the availability and quality of sell-side equity research. Peninsula has capitalized on this change by creating an investment framework that centers on actual market action and eliminates noise generated by the Street.

From its inception, Peninsula's disciplined approach has remained grounded in the same principle - fundamental stock selection based on quantitative, qualitative, and price performance analyses. Quantitative screening focuses the research team on earnings surprises that reflect an inflection point in a company's business, evident in both the company's fundamentals and actual stock performance. Qualitative methods then add in-depth analysis of earnings quality and trends in other business fundamentals. We strive to know how each stock fits into its peer group and how each relates to the market as a whole. By systematically allocating capital towards investments which possess accelerating or decelerating earnings revisions, we can capture the actual inflection point which translates into immediate profits. This versatile approach helps keep us from becoming complacent in our investing discipline.

We have become adept at objective decision-making and remain unbiased towards market direction or sector, resulting in risk-controlled returns. Rather than make predictions and let emotions influence the decision-making process, we choose to remain nimble and flexible in our reaction to actual market movements. Identification of industry trends leads to the path of least resistance.