SMID Cap Value Q1 2018


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40 to 50

companies in our fully invested, concentrated portfolio

14

year track record

$20

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

99%

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

92%

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 1 2018

Equity Composite Performance

  • Cooke & Bieler - Gross of Fees
  • Cooke & Bieler - Net of Fees
  • Russell 2500™ 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 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**
6.6% 9.5x 3.2x 14.4x 12.4x
3.3% 5.6x 3.4x 16.0x -
ROC 5 Year Avg 6.6% 3.3%
Cash Interest Coverage 9.5x 5.6x
Debt/EBITDA 3.2x 3.4x
Forecast P/E** 14.4x 16.0x
P/Normalized Earnings** 12.4x -
Period Ending: 3.31.2018 * 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
45 0.6 - 16.5 4.9 42%
1,762 0.005 - 14.8 4.7 -
# Holdings 45 1,762
Market Cap ($B) Range 0.6 - 16.5 0.005 - 14.8
Market Cap ($B) Wtd Avg 4.9 4.7
Annual Turnover 42% -
Source: Factset and Russell®

Top 10 Holdings1

FirstCash Inc. 4.4%
Schweitzer-Mauduit Int’l Inc. 3.4%
TCF Financial Corp. 3.4%
Helen of Troy Ltd. 3.4%
Gildan Activewear Inc. 3.3%
Umpqua Holdings Corp. 3.2%
Syneos Health Inc. 3.1%
AerCap Holdings NV 3.1%
Steelcase Inc. 3.1%
Colfax Corp. 2.7%

Top 10 Holdings1

FirstCash Inc. 4.4%
Schweitzer-Mauduit Int’l Inc. 3.4%
TCF Financial Corp. 3.4%
Helen of Troy Ltd. 3.4%
Gildan Activewear Inc. 3.3%
Umpqua Holdings Corp. 3.2%
Syneos Health Inc. 3.1%
AerCap Holdings NV 3.1%
Steelcase Inc. 3.1%
Colfax Corp. 2.7%

Sector Weights1

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

    C&B SMID Cap Value
    17.5%
    Russell 2500™ Value Index
    10.4%
  • Consumer Staples

    C&B SMID Cap Value
    1.2%
    Russell 2500™ Value Index
    3.2%
  • Energy

    C&B SMID Cap Value
    1.1%
    Russell 2500™ Value Index
    7.0%
  • Financials

    C&B SMID Cap Value
    20.8%
    Russell 2500™ Value Index
    25.3%
  • Health Care

    C&B SMID Cap Value
    10.1%
    Russell 2500™ Value Index
    5.6%
  • Industrials

    C&B SMID Cap Value
    25.0%
    Russell 2500™ Value Index
    13.5%
  • Information Technology

    C&B SMID Cap Value
    7.7%
    Russell 2500™ Value Index
    8.6%
  • Materials

    C&B SMID Cap Value
    13.9%
    Russell 2500™ Value Index
    5.6%
  • Real Estate

    C&B SMID Cap Value
    1.6%
    Russell 2500™ Value Index
    14.1%
  • Telecommunication Services

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

    C&B SMID Cap Value
    Russell 2500™ Value Index
    6.4%
  • Cash

    C&B SMID Cap Value
    1.0%
    Russell 2500™ 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 2500™ Value Index fell 2.65% in 1Q. Declines, while not dramatic, were broad-based with most sectors posting negative returns with the exception of Health Care, Information Technology, and Financials.

Additional Cooke & Bieler SMID Cap Value Disclosures