Firm History

Flint Ridge Partners LP was founded in 2006 by John P. Szabo, Jr.  The fund pursues a systematic, value-based, bottom-up approach to stock selection and a long-term investment horizon.   During his extensive career as an equity analyst, Mr. Szabo carefully observed institutional biases within the money management business, the most important of which was how the need for size and scale potentially hurt investment returns.  He set out to create Flint Ridge as a nimble fund focused on the highest and best investment opportunities regardless of market capitalization.    The portfolio is weighted toward relatively cheap, out-of-favor stocks across all sectors that are largely overlooked by institutional investors and Wall Street analysts.

Portfolio Manager

John P. Szabo, Jr. is the Fund’s Manager and Founder of the General Partner, Flint Ridge Capital LLC. With three decades of investment and finance experience, Mr. Szabo has built an extensive knowledge base covering both public and private companies across a wide range of industries. As a Board Member of a public company for ten years, Mr. Szabo is also well-versed in corporate governance, executive compensation, and strategic planning.

His background covers wide range of analytical and investment management expertise, including:

  • Over a decade of running Flint Ridge Partners, LP, a hedge fund with a specialty focus on small- and mid-cap investing
  • From 2005-2015, he served on the Board of Directors of Molina Healthcare, Inc., a publicly-traded company headquartered in Long Beach, CA.
  • Five years as Executive Director in CIBC World Markets equity research group. His analysis and valuation experience included covering the healthcare sector, as well as tracking over two dozen publicly-traded companies, and active participation in the equity and debt capital raising process for both private and public companies
  • Seven years as a buy-side analyst at Neuberger Berman, National City Corporation, and The State Teachers Retirement System of Ohio, covering a wide range of market sectors, including healthcare, financial services, and industrial stocks
  • Six years in global corporate finance, principally at The Mitsubishi Bank

Mr. Szabo holds a BSBA in finance and international business,
Bowling Green State University, OH, 1987

Fund Focus

Small-cap stocks are generally less efficiently valued than larger cap stocks and therefore offer bigger and more frequent money making opportunities. Small cap stocks are systematically ignored by many active institutional investors.  Managers with relatively large funds simply will not buy a $100 million market cap stock, for example, because it cannot materially affect performance, even if the stock doubles or triples. 
As an asset class, it is harder to scale small-cap stocks to multi-billion dollar asset levels, which discourages money management firms from investing in the sector as a business.Additionally, investors with a frenetic trading style tend to stay away from small-cap stocks because liquidity is not consistently adequate to support active trading.  As a result, there is relatively less competition for investment ideas in small cap stocks.

Small- and micro-cap sectors represent a large pool of investment opportunities that offer several advantages:

  • Inefficient pricing
  • Institutional investor and research analyst neglect
  • Incomplete or nonexistent company information readily available to public
  • Attractive environment for selective acquisition or privatization
  • Potential for outsized returns due to relatively small capitalization

Investment Strategy

The Manager’s value-oriented investment approach centers on identifying stocks with low price/book value ratios.  Focusing on a company’s net asset value enables the Manager to more accurately identify and effectively manage sustained downside risk.  To determine a company’s value, the Manager conducts fundamental analysis, estimates future earnings and cash flow, and determines appropriate valuation metrics.  The goal is to identify stocks with a reasonable opportunity for 100% price appreciation over a three-year period with 25% or less sustained downside.