We seek long-term growth of capital by investing in U.S. large capitalization companies that the investment team believes are undervalued by the market.
We believe that investing in companies that are trading at a discount to both the market price/earnings ratio and their intrinsic value can produce superior long-term investment returns. We seek to invest in out-of-favor companies with viable business models and improving financials.
- Invest in low multiple, low expectation stocks using traditional valuation and cash flow metrics
- Target companies whose value we believe to be underappreciated by the market
- Utilize internal research analyst recommendations
- Bottom-up stock selection with long-term investment horizon
The investment decision-making process is a disciplined, research driven, bottom-up process, which leverages the network of GEAM resources. The U.S. Value Equity team begins with a universe of +/-750 stocks (Russell 1000 Value as well as certain out-of-benchmark companies). Of this universe, 400+ are closely followed on a daily basis by GEAM’s research team. The U.S. Value Equity team further narrows down this list by using value screens based on earnings and cash flow. The team will then analyze both the financial statements and competitive positioning in search of stocks that they believe are inexpensive and that meet the strategy’s investment criteria. The final portfolio typically holds < 50 stocks, predominantly large cap companies. Overweight positions are correlated with upside potential. Once a stock is sold, its proceeds are a source of funds for what we believe to be better large cap value investments. The portfolio strives to be fully invested and is monitored daily as part of the portfolio risk control process.
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