Our Core Value Equity Portfolio is designed for investors who seek opportunity for both capital appreciation and current income. Although no guarantee can be made about the future, the portfolio has historically exhibited less volatility than the broader stock market.

Our proprietary Core Value Equity Portfolio includes both “core”, or stable growing companies, and “value”, or undervalued companies. The process for selecting core stocks focuses on identifying companies with sustainable earnings growth. Here we identify companies with competitive advantage, leading market share, strong balance sheets, and attractive return on capital. We also look for a record of consistent earnings and cash flow growth. While such companies are seldom available at low valuations, we review a company’s valuation relative to its historical ranges to avoid purchases at times when the valuation is rich. This valuation process looks at a company’s price relative to its current and forecasted cash flow, earnings, and sales.

The selection of value stocks is based on history’s proof that all companies, even great companies, will go through periodic slumps either due to the economy overall or due to company-specific issues. It is at these times that the market often becomes overly pessimistic toward the prospects for a company’s future recovery. Our process of selecting value stocks looks for companies with strong franchises whose recent performance has disappointed investors. These companies become candidates for the Core Value Style if they meet the following criteria. First, the company needs to exhibit reasons why its performance will improve over a reasonable time frame. Second, the company must have a strong balance sheet that will allow it to weather its current period of slumping performance. Finally, the company’s valuation needs to be at multi-year lows relative to forecasted cash flow, earnings, sales, and or book value. By purchasing quality companies at multi-year low valuations, after the bad news has been revealed, we reduce our downside risk and provide opportunity for out-performance at the first signs of company operating improvement.