Mid Cap Value Q4 2018


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40 to 50

companies in our fully invested, concentrated portfolio

20

year track record

$503

million Mid Cap Value assets under management as of 12/31/2018

101%

upside market capture ratio since 2000

82%

downside market capture ratio since 2000

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    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 2018

Equity Composite Performance

  • Cooke & Bieler - Gross of Fees
  • Cooke & Bieler - Net of Fees
  • Russell Midcap® Value Index
Annualized Returns As of 12.31.2018 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 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**
13.9% 10.2x 2.4x 11.0x 10.5x
9.2% 6.4x 3.1x 14.0x -
ROC 5 Year Avg 13.9% 9.2%
Cash Interest Coverage 10.2x 6.4x
Debt/EBITDA 2.4x 3.1x
Forecast P/E** 11.0x 14.0x
P/Normalized Earnings** 10.5x -
Period Ending: 12.31.2018 * 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
48 0.5 - 35.2 9.5 35%
592 0.5 - 67.9 12.9 -
# Holdings 48 592
Market Cap ($B) Range 0.5 - 35.2 0.5 - 67.9
Market Cap ($B) Wtd Avg 9.5 12.9
Annual Turnover 35% -
Source: Factset and Russell®

Top 10 Holdings1

Gildan Activewear 3.5%
Arrow Electronics 3.4%
Colfax 3.3%
Fidelity National Financial 3.3%
Crown Holdings 3.2%
Omnicom Group 2.9%
State Street 2.8%
AerCap Holdings 2.7%
FirstCash 2.7%
TCF Financial 2.6%

Top 10 Holdings1

Gildan Activewear 3.5%
Arrow Electronics 3.4%
Colfax 3.3%
Fidelity National Financial 3.3%
Crown Holdings 3.2%
Omnicom Group 2.9%
State Street 2.8%
AerCap Holdings 2.7%
FirstCash 2.7%
TCF Financial 2.6%

Sector Weights1

  • C&B Mid Cap Value
  • Russell Midcap® Value Index
  • Communication Services

    C&B Mid Cap Value
    2.9%
    Russell Midcap® Value Index
    3.3%
  • Consumer Discretionary

    C&B Mid Cap Value
    11.7%
    Russell Midcap® Value Index
    8.8%
  • Consumer Staples

    C&B Mid Cap Value
    Russell Midcap® Value Index
    5.2%
  • Energy

    C&B Mid Cap Value
    Russell Midcap® Value Index
    5.7%
  • Financials

    C&B Mid Cap Value
    22.9%
    Russell Midcap® Value Index
    17.5%
  • Health Care

    C&B Mid Cap Value
    9.2%
    Russell Midcap® Value Index
    6.8%
  • Industrials

    C&B Mid Cap Value
    25.3%
    Russell Midcap® Value Index
    11.9%
  • Information Technology

    C&B Mid Cap Value
    13.8%
    Russell Midcap® Value Index
    8.4%
  • Materials

    C&B Mid Cap Value
    10.1%
    Russell Midcap® Value Index
    6.2%
  • Real Estate

    C&B Mid Cap Value
    1.8%
    Russell Midcap® Value Index
    14.2%
  • Utilities

    C&B Mid Cap Value
    Russell Midcap® Value Index
    12.0%
  • Cash

    C&B Mid Cap Value
    2.4%
    Russell Midcap® Value Index
Source: Factset and Russell®

Market Commentary

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U.S. equities performed poorly in the fourth quarter. What began as a modest pullback devolved into a market rout in December. In the end, it was the worst fourth quarter since 2008.

The Russell Midcap® Value Index (RMV) declined 14.95% in the fourth quarter. As tends to be the case in sudden, major pullbacks, selling pressure was widespread and largely indiscriminate.

Additional Cooke & Bieler Mid Cap Value Disclosures