SMID Cap Value Q4 2017


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40 to 50

companies in our fully invested, concentrated portfolio

14

year track record

$21

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

99%

upside market capture ratio since inception (1/1/04)

91%

downside market capture ratio since inception (1/1/04)

  • 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

SMID Cap Value

Quarter 4 2017

Equity Composite Performance

  • Cooke & Bieler - Gross of Fees
  • Cooke & Bieler - Net of Fees
  • Russell 2500™ 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 SMID Cap Value Performance Disclosures

Quality Characteristics1

  • C&B SMID Cap Value
  • Russell 2500™ Value Index*
ROC 5 Year Avg Cash Interest Coverage Debt/Ebitda Forecast P/E** P/Normalized Earnings**
6.1% 8.1x 3.0x 16.8x 13.7x
3.4% 5.9x 3.3x 18.4x -
ROC 5 Year Avg 6.1% 3.4%
Cash Interest Coverage 8.1x 5.9x
Debt/Ebitda 3.0x 3.3x
Forecast P/E** 16.8x 18.4x
P/Normalized Earnings** 13.7x -
Period Ending: 12.31.2017 * Median ** Weighted Harmonic Mean Source: Factset and Russell®

Portfolio Attributes1

  • C&B SMID Cap Value
  • Russell 2500™ Value Index
# Holdings Market Cap ($B) Range Market Cap ($B) WTD Avg Annual Turnover
44 0.8 - 16.3 5.3 60%
1,752 0.004 - 28.4 4.8 -
# Holdings 44 1,752
Market Cap ($B) Range 0.8 - 16.3 0.004 - 28.4
Market Cap ($B) WTD Avg 5.3 4.8
Annual Turnover 60% -
Source: Factset and Russell®

Top 10 Holdings1

Schweitzer-Mauduit Int’l Inc. 3.8%
FirstCash Inc. 3.8%
Syneos Health Inc. 3.7%
Gildan Activewear Inc. 3.5%
Quanex Building Products 3.3%
Steelcase Inc. 3.3%
AerCap Holdings NV 3.1%
Helen of Troy Ltd. 3.1%
Umpqua Holdings Corp. 3.0%
RenaissanceRe Holdings Ltd. 3.0%

Top 10 Holdings1

Schweitzer-Mauduit Int’l Inc. 3.8%
FirstCash Inc. 3.8%
Syneos Health Inc. 3.7%
Gildan Activewear Inc. 3.5%
Quanex Building Products 3.3%
Steelcase Inc. 3.3%
AerCap Holdings NV 3.1%
Helen of Troy Ltd. 3.1%
Umpqua Holdings Corp. 3.0%
RenaissanceRe Holdings Ltd. 3.0%

Sector Weights1

  • C&B SMID Cap Value
  • Russell 2500™ Value Index
  • Consumer Discretionary

    C&B SMID Cap Value
    17.1%
    Russell 2500™ Value Index
    10.7%
  • Consumer Staples

    C&B SMID Cap Value
    1.3%
    Russell 2500™ Value Index
    3.4%
  • Energy

    C&B SMID Cap Value
    1.2%
    Russell 2500™ Value Index
    7.2%
  • Financials

    C&B SMID Cap Value
    19.9%
    Russell 2500™ Value Index
    24.1%
  • Health Care

    C&B SMID Cap Value
    11.8%
    Russell 2500™ Value Index
    5.5%
  • Industrials

    C&B SMID Cap Value
    21.4%
    Russell 2500™ Value Index
    13.6%
  • Information Technology

    C&B SMID Cap Value
    6.8%
    Russell 2500™ Value Index
    8.1%
  • Materials

    C&B SMID Cap Value
    14.0%
    Russell 2500™ Value Index
    5.8%
  • Real Estate

    C&B SMID Cap Value
    1.4%
    Russell 2500™ Value Index
    14.5%
  • Telecommunication Services

    C&B SMID Cap Value
    Russell 2500™ Value Index
    0.3%
  • Utilities

    C&B SMID Cap Value
    Russell 2500™ Value Index
    6.7%
  • Cash

    C&B SMID Cap Value
    5.2%
    Russell 2500™ Value Index
Source: Factset and Russell®

Market Commentary

Download Commentary

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 2500™ Value Index returned 4.25% for the quarter, closing the year up 10.36%.

Additional Cooke & Bieler SMID Cap Value Disclosures