We constantly evaluate the key investment-case elements for each of our holdings and prepare an exception report each week that flags any number of issues. These include when there are material changes in the remaining upside to our target price, when earnings estimates are revised downward, when questions have arisen about any existing catalysts, when [...]
In our flagship domestic and international products we do not hold individual positions over 5 percent and will not have more than 30 percent in any one sector. Historically, whether it was energy in the 1980s, technology in the late 1990s, or financials more recently, when a single sector approaches 30 percent of our portfolio [...]
You have to be reasonably early and we of course love to get in at the absolute bottom, but so long as our valuation work indicates enough upside and we're confident in management's ability to execute, we'll initiate a position even after a restructuring is well underway or a problem is already on its way [...]
We think it's difficult to have a reliable view of events beyond 12 to 18 months, so we focus on specific investment catalysts that can move stocks toward their warranted target prices over the next 12 to 18 months. We've identified five primary catalysts management, restructuring, problem fixing, new products, and pricing flexibility that we [...]
Companies going through operating or financial restructuring can go into a bit of an information vacuum, which can provide a good entry point into a position. There’s often uncertainty about the specific programs being instituted, management may be less apt to provide guidance and, because the change is ongoing, the results are by definition unclear.