Investment Process

Investments are based on fundamental and detailed research and analysis, with particular emphasis on stocks with low absolute and relative P/E ratios:

- From a starting universe of the 1,250 largest U.S. equities, we methodically identify the least expensive based upon absolute P/E and P/E versus a company’s historic norms.
- The opportunity set of approximately 250 are subjected to our “value check” process which confirms valuation attractiveness.
- We then conduct thorough fundamental research on the resulting list of 80-100 companies, which typically includes visits and conversations with company management, competitors, customers, analysts, etc.
- We develop our own earnings, cash flow, and balance sheet models and cross check our own normalized estimates with company management and also with Wall Street analysts.
- We prepare detailed valuation models to develop price objectives.

We sell a stock if the company fails to meet our fundamental performance objectives or when it reaches our price target.