Small Cap Value Q1 2018


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40 to 60

companies in our fully invested, concentrated portfolio

9

year track record

$896

million Small Cap Value assets under management as of 3/31/2018

109%

upside market capture ratio since inception (8/1/08)

74%

downside market capture ratio since inception (8/1/08)

  • 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

Small Cap Value

Quarter 1 2018

Equity Composite Performance

  • Cooke & Bieler - Gross of fees
  • Cooke & Bieler - Net of fees
  • Russell 2000® Value Index
Annualized Returns As of 3.31.2018 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 Small Cap Value Performance Disclosures

Quality Characteristics1

  • C&B Small Cap Value
  • Russell 2000® Value Index*
ROC 5 Year Avg Cash Interest Coverage Debt/EBITDA Forecasted P/E** P/Normalized Earnings**
7.1% 9.9x 2.2x 15.1x 12.1x
2.9% 5.3x 3.4x 15.4x -
ROC 5 Year Avg 7.1% 2.9%
Cash Interest Coverage 9.9x 5.3x
Debt/EBITDA 2.2x 3.4x
Forecasted P/E** 15.1x 15.4x
P/Normalized Earnings** 12.1x -
Period Ending: 3.31.2018 * Median ** Weighted Harmonic Mean Source: Factset and Russell®

Portfolio Attributes1

  • C&B Small Cap Value
  • Russell 2000® Value Index
# Holdings Market Cap ($B) Range Market Cap ($B) Wtd Avg Annual Turnover
42 0.4 - 6.4 2.9 40%
1,398 0.005 - 8.4 2.0 -
# Holdings 42 1,398
Market Cap ($B) Range 0.4 - 6.4 0.005 - 8.4
Market Cap ($B) Wtd Avg 2.9 2.0
Annual Turnover 40% -
Source: Factset and Russell®

Top 10 Holdings1

FirstCash Inc. 4.3%
Schweitzer-Mauduit Int’l Inc. 4.0%
Gildan Activewear Inc. 3.9%
TCF Financial Corp. 3.7%
Helen of Troy Ltd. 3.6%
Steelcase Inc. 3.5%
Syneos Health Inc. 3.3%
Quanex Building Products 3.3%
Umpqua Holdings Corp. 3.1%
PRA Group Inc. 2.9%

Top 10 Holdings1

FirstCash Inc. 4.3%
Schweitzer-Mauduit Int’l Inc. 4.0%
Gildan Activewear Inc. 3.9%
TCF Financial Corp. 3.7%
Helen of Troy Ltd. 3.6%
Steelcase Inc. 3.5%
Syneos Health Inc. 3.3%
Quanex Building Products 3.3%
Umpqua Holdings Corp. 3.1%
PRA Group Inc. 2.9%

Sector Weights1

  • C&B Small Cap Value
  • Russell 2000® Value Index
  • Consumer Discretionary

    C&B Small Cap Value
    21.0%
    Russell 2000® Value Index
    11.0%
  • Consumer Staples

    C&B Small Cap Value
    1.2%
    Russell 2000® Value Index
    2.2%
  • Energy

    C&B Small Cap Value
    1.2%
    Russell 2000® Value Index
    6.4%
  • Financials

    C&B Small Cap Value
    21.6%
    Russell 2000® Value Index
    31.4%
  • Health Care

    C&B Small Cap Value
    8.6%
    Russell 2000® Value Index
    6.8%
  • Industrials

    C&B Small Cap Value
    27.2%
    Russell 2000® Value Index
    12.3%
  • Information Technology

    C&B Small Cap Value
    6.0%
    Russell 2000® Value Index
    8.9%
  • Materials

    C&B Small Cap Value
    8.4%
    Russell 2000® Value Index
    4.3%
  • Real Estate

    C&B Small Cap Value
    0.7%
    Russell 2000® Value Index
    9.9%
  • Telecommunication Services

    C&B Small Cap Value
    Russell 2000® Value Index
    0.5%
  • Utilities

    C&B Small Cap Value
    Russell 2000® Value Index
    6.3%
  • Cash

    C&B Small Cap Value
    4.0%
    Russell 2000® Value Index
Source: Factset and Russell®

Market Commentary

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After delivering nine consecutive quarters of positive returns, U.S. equities, as measured by the S&P 500 Index, delivered the first quarter of negative returns since the third quarter of 2015. Volatility also returned during the first quarter. In 2017, there were eight days in which the S&P 500 advanced or declined more than 1%. In the first quarter of 2018, there were 23.

The Russell 2000® Value Index fell 2.64% in 1Q. Declines, while not dramatic, were broad-based with most sectors posting negative returns with the exception of Health Care and Financials.

Additional Cooke & Bieler Small Cap Value Disclosures