Equity Investment Process

Our equity process is focused on maintaining portfolios with a few dozen stocks held for the long term.
We view each equity portfolio as an exclusive collection of quality companies. With low turnover and a highly-concentrated portfolio, we are very selective.

	Characteristics	Key Measures
Quality	Long-term track record	10 years or more of operating and earnings history
	Consistent management and strategy	Company's actions match management's words
	Conservative balance sheet	Low debt/equity ratio
	High-quality or improving operating earnings	"Per share" profitability Higher return on equity (ROE) Lower price/book ratio Dividend growth
	Self-sustaining businesses (positive cash flow)	Cash flow exceeding net income Stable share count
Value	Cheaper, less expensive	Lower price-to-earnings (P/E) multiple (relative and absolute)
Value	Shorter payback period	Discount to net asset value (NAV)

As contrarians, we constantly look for, and sometimes invest in, companies with excellent management teams and great business strategies but which are suffering from what we consider to be temporary setbacks.

Research and Analysis

Portfolio Construction

Risk Management