Mid Cap Value Q1 2017


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40 to 50

companies in our fully invested, concentrated portfolio

19

year track record

$522

million Mid Cap Value assets under management as of 3/31/2017

100%

upside market capture ratio since 2000

79%

downside market capture ratio since 2000

  • Guides

    Philosophy

    • Fundamentals drive stock prices
    • Capital preservation improves returns
    • Culture shapes investment decisions
  • Shapes

    Process

    • Thorough, proprietary research by career analysts
    • Focus on valuation and risk controls
    • Team environment – group discussion/analyst decision
  • Generates

    Portfolio

    • Concentrated and diversified
    • Long-term/low turnover
    • Fully invested/limit on cash
  • Performance

    • Consistent pattern of results
    • Objective: Outperform the benchmark over the longer term

Mid Cap Value

Quarter 1 2017

Equity Composite Performance

  • Cooke & Bieler - Gross of Fees
  • Cooke & Bieler - Net of Fees
  • Russell Midcap® Value Index
Periods Ending 3.31.2017 Source: Factset and Russell® Past Performance is not indicative of future results Taxable client returns may vary from the results above due to tax-efficient portfolio management and higher fee schedules that result from lower portfolio minimums. Click for additional C&B Mid Cap Value Performance Disclosures

Quality Characteristics1

  • C&B Mid Cap Value
  • Russell Midcap® Value Index*
ROC 5 Year Avg. Cash Interest Coverage Debt/EBITDA Forecast P/E** P/Normalized Earnings**
8.0% 10.2x 2.3x 15.2x 13.5x
4.5% 6.4x 3.0x 18.0x
ROC 5 Year Avg. 8.0% 4.5%
Cash Interest Coverage 10.2x 6.4x
Debt/EBITDA 2.3x 3.0x
Forecast P/E** 15.2x 18.0x
P/Normalized Earnings** 13.5x
Period Ending: 3.31.2017 * Median ** Weighted Harmonic Mean Source: Factset and Russell®

Portfolio Attributes1

  • C&B Mid Cap Value
  • Russell Midcap® Value Index
# Holdings Market Cap ($B) Range Market Cap ($B) WTD Avg. Annual Turnover
48 0.7 - 33.3 9.8 41%
565 0.6 - 39.5 13.8
# Holdings 48 565
Market Cap ($B) Range 0.7 - 33.3 0.6 - 39.5
Market Cap ($B) WTD Avg. 9.8 13.8
Annual Turnover 41%
Source: Factset and Russell®

Top 10 Holdings1

Gildan Activewear Inc. 3.3%
FirstCash Inc. 3.2%
AerCap Holdings NV 3.0%
Laboratory Corporation of America 3.0%
Fidelity National Financial Inc. 2.8%
Mednax Inc. 2.8%
RenaissanceRe Holdings Ltd. 2.8%
Axalta Coating Systems Ltd. 2.6%
Omnicom Group Inc. 2.5%
Whirlpool Corp. 2.5%

Top 10 Holdings1

Gildan Activewear Inc. 3.3%
FirstCash Inc. 3.2%
AerCap Holdings NV 3.0%
Laboratory Corporation of America 3.0%
Fidelity National Financial Inc. 2.8%
Mednax Inc. 2.8%
RenaissanceRe Holdings Ltd. 2.8%
Axalta Coating Systems Ltd. 2.6%
Omnicom Group Inc. 2.5%
Whirlpool Corp. 2.5%

Sector Weights1

  • C&B Mid Cap Value
  • Russell Midcap® Value Index
  • Consumer Discretionary

    C&B Mid Cap Value
    16.7%
    Russell Midcap® Value Index
    8.5%
  • Consumer Staples

    C&B Mid Cap Value
    2.0%
    Russell Midcap® Value Index
    3.3%
  • Energy

    C&B Mid Cap Value
    1.6%
    Russell Midcap® Value Index
    9.6%
  • Financials

    C&B Mid Cap Value
    21.9%
    Russell Midcap® Value Index
    19.6%
  • Health Care

    C&B Mid Cap Value
    9.9%
    Russell Midcap® Value Index
    4.1%
  • Industrials

    C&B Mid Cap Value
    18.8%
    Russell Midcap® Value Index
    12.9%
  • Information Technology

    C&B Mid Cap Value
    10.4%
    Russell Midcap® Value Index
    9.5%
  • Materials

    C&B Mid Cap Value
    11.1%
    Russell Midcap® Value Index
    6.1%
  • Real Estate

    C&B Mid Cap Value
    1.8%
    Russell Midcap® Value Index
    14.0%
  • Telecommunication Services

    C&B Mid Cap Value
    Russell Midcap® Value Index
    1.2%
  • Utilities

    C&B Mid Cap Value
    Russell Midcap® Value Index
    11.2%
  • Cash

    C&B Mid Cap Value
    5.8%
    Russell Midcap® Value Index
Source: Factset and Russell®

Market Commentary

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In the first quarter, the Russell Midcap® Value Index (RMV) posted the highest return of any of the major Russell Value Indices, a continuation of the robust performance seen in 2016. Performance drivers differed from those of late 2016, though, as investors struggled to process and predict the impact of legislative outcomes across a variety of industries. Sectors that did well in the post-election surge, including Energy and Financials, took a step back, and others, particularly Health Care and Information Technology, advanced. Similarly, the style characteristics that propelled equities higher in November and December shifted. Investors rewarded size this quarter, and displayed a renewed interest in higher quality businesses with good growth prospects. Companies with the highest return on capital profiles tended to outperform those with the lowest and growth outperformed value, standing in clear contrast to the patterns that drove markets in Q4 2016.

Additional Cooke & Bieler Mid Cap Value Disclosures