Mid Cap Value Q4 2017


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40 to 50

companies in our fully invested, concentrated portfolio

19

year track record

$519

million Mid Cap Value assets under management as of 12/31/2017

101%

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 4 2017

Equity Composite Performance

  • Cooke & Bieler - Gross of Fees
  • Cooke & Bieler - Net of Fees
  • Russell Midcap® Value Index
Annualized Returns As of 12.31.2017 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**
6.5% 10.6x 2.8x 16.3x 13.9x
4.7% 6.9x 3.3x 18.5x -
ROC 5 Year Avg. 6.5% 4.7%
Cash Interest Coverage 10.6x 6.9x
Debt/EBITDA 2.8x 3.3x
Forecast P/E** 16.3x 18.5x
P/Normalized Earnings** 13.9x -
Period Ending: 12.31.2017 * 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
47 0.8 - 36.2 10.4 35%
584 0.7 - 36.7 14.2 -
# Holdings 47 584
Market Cap ($B) Range 0.8 - 36.2 0.7 - 36.7
Market Cap ($B) WTD Avg. 10.4 14.2
Annual Turnover 35% -
Source: Factset and Russell®

Top 10 Holdings1

FirstCash Inc. 3.6%
Gildan Activewear Inc. 3.5%
Schweitzer-Mauduit Int’l Inc. 3.4%
TCF Financial Corp. 3.2%
AerCap Holdings NV 3.1%
RenaissanceRe Holdings Ltd. 3.0%
Syneos Health Inc. 2.9%
Helen of Troy Ltd. 2.8%
Genpact Ltd. 2.8%
Omnicom Group Inc. 2.7%

Top 10 Holdings1

FirstCash Inc. 3.6%
Gildan Activewear Inc. 3.5%
Schweitzer-Mauduit Int’l Inc. 3.4%
TCF Financial Corp. 3.2%
AerCap Holdings NV 3.1%
RenaissanceRe Holdings Ltd. 3.0%
Syneos Health Inc. 2.9%
Helen of Troy Ltd. 2.8%
Genpact Ltd. 2.8%
Omnicom Group Inc. 2.7%

Sector Weights1

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

    C&B Mid Cap Value
    17.8%
    Russell Midcap® Value Index
    12.0%
  • Consumer Staples

    C&B Mid Cap Value
    1.3%
    Russell Midcap® Value Index
    4.0%
  • Energy

    C&B Mid Cap Value
    1.4%
    Russell Midcap® Value Index
    8.3%
  • Financials

    C&B Mid Cap Value
    23.7%
    Russell Midcap® Value Index
    20.3%
  • Health Care

    C&B Mid Cap Value
    10.6%
    Russell Midcap® Value Index
    6.5%
  • Industrials

    C&B Mid Cap Value
    18.0%
    Russell Midcap® Value Index
    12.2%
  • Information Technology

    C&B Mid Cap Value
    9.2%
    Russell Midcap® Value Index
    6.1%
  • Materials

    C&B Mid Cap Value
    11.2%
    Russell Midcap® Value Index
    5.6%
  • Real Estate

    C&B Mid Cap Value
    1.4%
    Russell Midcap® Value Index
    14.2%
  • Telecommunication Services

    C&B Mid Cap Value
    Russell Midcap® Value Index
    0.5%
  • Utilities

    C&B Mid Cap Value
    Russell Midcap® Value Index
    10.3%
  • Cash

    C&B Mid Cap Value
    5.5%
    Russell Midcap® Value Index
Source: Factset and Russell®

Market Commentary

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After posting robust, steady gains in the first three quarters of 2017, U.S. equities delivered another quarter of positive returns – the ninth consecutive one for the market as measured by the S&P 500 Index. Investors responded enthusiastically as the prospect of tax reform materialized, increasing the likelihood of continued earnings growth fueled by a lower corporate tax rate.

The major Russell U.S. equity indices ended Q4 and 2017 in positive territory as large cap stocks outperformed small cap stocks, reversing a trend that dominated in 2016. The Russell Midcap® Value Index (RMV) returned 5.50% for the quarter, closing the year up 13.34%.

Additional Cooke & Bieler Mid Cap Value Disclosures