SMID Cap Value Q4 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 12/31/2018

100%

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

93%

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 2018

Equity Composite Performance

  • Cooke & Bieler - Gross of Fees
  • Cooke & Bieler - Net of Fees
  • Russell 2500™ 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 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 Forecasted P/E** P/Normalized Earnings**
12.2% 6.7x 3.2x 11.5x 10.3x
7.2% 5.5x 3.3x 15.1x -
ROC 5 Year Avg 12.2% 7.2%
Cash Interest Coverage 6.7x 5.5x
Debt/EBITDA 3.2x 3.3x
Forecasted P/E** 11.5x 15.1x
P/Normalized Earnings** 10.3x -
Period Ending: 12.31.2018 * 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
47 0.5 - 13.6 4.5 47%
1,748 0.03 - 12.5 4.3 -
# Holdings 47 1,748
Market Cap ($B) Range 0.5 - 13.6 0.03 - 12.5
Market Cap ($B) Wtd Avg 4.5 4.3
Annual Turnover 47% -
Source: Factset and Russell®

Top 10 Holdings1

Gildan Activewear 4.0%
Winnebago Industries 3.8%
Arrow Electronics 3.5%
Colfax 3.3%
Steelcase 3.1%
Crown Holdings 3.0%
Fidelity National Financial 2.8%
Helen of Troy 2.7%
FirstCash 2.7%
Schweitzer-Mauduit 2.7%

Top 10 Holdings1

Gildan Activewear 4.0%
Winnebago Industries 3.8%
Arrow Electronics 3.5%
Colfax 3.3%
Steelcase 3.1%
Crown Holdings 3.0%
Fidelity National Financial 2.8%
Helen of Troy 2.7%
FirstCash 2.7%
Schweitzer-Mauduit 2.7%

Sector Weights1

  • C&B SMID Cap Value
  • Russell 2500™ Value Index
  • Communication Services

    C&B SMID Cap Value
    Russell 2500™ Value Index
    3.2%
  • Consumer Discretionary

    C&B SMID Cap Value
    15.1%
    Russell 2500™ Value Index
    8.3%
  • Consumer Staples

    C&B SMID Cap Value
    Russell 2500™ Value Index
    3.3%
  • Energy

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

    C&B SMID Cap Value
    18.5%
    Russell 2500™ Value Index
    23.3%
  • Health Care

    C&B SMID Cap Value
    10.5%
    Russell 2500™ Value Index
    5.0%
  • Industrials

    C&B SMID Cap Value
    27.8%
    Russell 2500™ Value Index
    13.5%
  • Information Technology

    C&B SMID Cap Value
    13.3%
    Russell 2500™ Value Index
    9.0%
  • Materials

    C&B SMID Cap Value
    12.5%
    Russell 2500™ Value Index
    5.9%
  • Real Estate

    C&B SMID Cap Value
    1.8%
    Russell 2500™ Value Index
    16.0%
  • Utilities

    C&B SMID Cap Value
    Russell 2500™ Value Index
    7.5%
  • Cash

    C&B SMID Cap Value
    0.5%
    Russell 2500™ 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 2500™ Value Index (R25IV) declined 17.12% in the fourth quarter. As tends to be the case in sudden, major pullbacks, selling pressure was widespread and largely indiscriminate.

Additional Cooke & Bieler SMID Cap Value Disclosures