Our portfolio managers evaluate and purchase stocks based on the following Eight Investment Criteria:

Required over the entire holding period

1. Meets an economic need
2. Strong competitive advantage (wide moats or barriers to entry)
3. Long history of profitability and strong operating metrics
4. Generates high levels of free cash flow 
5. Available at a low price in relation to intrinsic value

Favored, but not required

6. Management’s history of shareholder friendliness
7. Strong balance sheet
8. Strong insider ownership (preferably with recent purchases)

Every company we own must satisfy the required criteria. For companies that do not also meet the favored criteria, we believe these short-term conditions will be ultimately corrected or overwhelmed by the required criteria.  

Sell Criteria

Companies are sold if they deviate significantly from these criteria or if their stock price becomes unreasonable due to dramatic price appreciation in relation to underlying fundamentals. When a security falls 15-20% from our purchase price or relative to a peer group, the portfolio managers execute a formal, intensified review.

Capital Appreciation Strategy

Portfolio Managers

William Smead

Tony Scherrer, CFA

Cole Smead, CFA

Strategy Seeks long-term capital appreciation through concentrated positions; it will maintain approximately 25-30 companies in the portfolio. This portfolio invests in U.S. large capitalization companies through the ownership of common stock.
Investment Objective Long-term Capital Appreciation
Inception of Strategy 2008

Strategy Literature

Our firm has deep roots in the investment advisory business through the careers of our experienced staff. We understand the careful balance you have to strike between knowing what’s right for the client and getting the client to act on your prudent advice. We believe our firm’s thought leadership in the missives, quarterly newsletters and media appearances we publish help level that precise balance.

We seek to partner with advisors whether they are registered investment advisors or financial advisors of a broker dealer organization. Advisors can access our firm’s investment strategy through separately managed accounts (SMA), wrap accounts, sub-advisory or our mutual funds.

Family wealth is amassed through long-term ownership of both publicly-traded and privately held companies. Those who have built wealth slowly have already exercised a demeanor that leads to interest in our firm’s philosophy and strategy. Whether you are the patriarch/matriarch overseeing the wealth of your relatives or an advisor providing due diligence and trust to a group of families you work with, we are here to serve the wealth creation needs that you have by taking risk in the common stocks of durational businesses.

We seek to work for and with single-family offices and multi-family offices. Both single- and multi-family offices can access our firm’s investment strategies through separately managed accounts (SMA), wrap accounts, sub-advisory or our mutual funds.

Institutional Investors, whether they be foundations, endowments, defined benefit, Taft-Hartley or 401(k) plans, have needs that must be filled based on the particular mandate of their organization or the participants they represent. We understand the role our firm can perform, for these institutions as well as the consulting firms that advise them, through the long-duration common stock strategy that we manage on behalf of our investors.

We seek to work for institutional investors directly or through their investment committees and consultants. Institutional investors and plans can access our firm’s investment strategies through separately managed accounts (SMA), sub-advisory mandates or our mutual funds.