SMID Cap Value Q2 2018


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40 to 50

companies in our fully invested, concentrated portfolio

14

year track record

$19

million SMID Cap Value assets under management as of 6/30/2018

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 2 2018

Equity Composite Performance

  • Cooke & Bieler - Gross of Fees
  • Cooke & Bieler - Net of Fees
  • Russell 2500™ Value Index
Annualized Returns As of 6.30.2018 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**
7.4% 6.6x 3.3x 14.4x 12.8x
4.0% 5.5x 3.4x 18.1x -
ROC 5 Year Avg 7.4% 4.0%
Cash Interest Coverage 6.6x 5.5x
Debt/EBITDA 3.3x 3.4x
Forecast P/E** 14.4x 18.1x
P/Normalized Earnings** 12.8x -
Period Ending: 6.30.2018 * 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 - 18.3 5.2 49%
1,727 0.09 - 13.9 4.7 -
# Holdings 45 1,727
Market Cap ($B) Range 0.6 - 18.3 0.09 - 13.9
Market Cap ($B) Wtd Avg 5.2 4.7
Annual Turnover 49% -
Source: Factset and Russell®

Top 10 Holdings1

Helen of Troy Ltd. 4.1%
Schweitzer-Mauduit Int’l Inc. 3.7%
Syneos Health Inc. 3.4%
AerCap Holdings NV 3.2%
TCF Financial Corp. 3.1%
Gildan Activewear Inc. 3.1%
Umpqua Holdings Corp. 3.0%
FirstCash Inc. 2.9%
Colfax Corp. 2.9%
Steelcase Inc. 2.8%

Top 10 Holdings1

Helen of Troy Ltd. 4.1%
Schweitzer-Mauduit Int’l Inc. 3.7%
Syneos Health Inc. 3.4%
AerCap Holdings NV 3.2%
TCF Financial Corp. 3.1%
Gildan Activewear Inc. 3.1%
Umpqua Holdings Corp. 3.0%
FirstCash Inc. 2.9%
Colfax Corp. 2.9%
Steelcase Inc. 2.8%

Sector Weights1

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

    C&B SMID Cap Value
    16.9%
    Russell 2500™ Value Index
    10.9%
  • Consumer Staples

    C&B SMID Cap Value
    1.2%
    Russell 2500™ Value Index
    3.5%
  • Energy

    C&B SMID Cap Value
    1.0%
    Russell 2500™ Value Index
    7.4%
  • Financials

    C&B SMID Cap Value
    18.4%
    Russell 2500™ Value Index
    22.9%
  • Health Care

    C&B SMID Cap Value
    11.6%
    Russell 2500™ Value Index
    5.0%
  • Industrials

    C&B SMID Cap Value
    22.6%
    Russell 2500™ Value Index
    13.3%
  • Information Technology

    C&B SMID Cap Value
    9.3%
    Russell 2500™ Value Index
    9.0%
  • Materials

    C&B SMID Cap Value
    14.6%
    Russell 2500™ Value Index
    6.1%
  • Real Estate

    C&B SMID Cap Value
    1.5%
    Russell 2500™ Value Index
    15.5%
  • Telecommunication Services

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

    C&B SMID Cap Value
    Russell 2500™ Value Index
    6.2%
  • Cash

    C&B SMID Cap Value
    2.7%
    Russell 2500™ Value Index
Source: Factset and Russell®

Market Commentary

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U.S. equity indices posted positive returns in the second quarter, with small capitalization stocks outperforming larger ones by a meaningful margin.

The Russell 2500™ Value Index (R25IV) returned 5.80% for the quarter, with the late-quarter rise in oil prices driving outsized returns among the benchmark’s Energy constituents and a flattening yield curve propelling its REITs.

Additional Cooke & Bieler SMID Cap Value Disclosures