Small Cap Value Q3 2019


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40 to 60

companies in our fully invested, concentrated portfolio

11

year track record

$1.1

billion Small Cap Value assets under management as of 9/30/2019

111%

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

77%

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 3 2019

Equity Composite Performance

  • Cooke & Bieler - Gross of Fees
  • Cooke & Bieler - Net of Fees
  • Russell 2000® Value Index
Annualized Returns As of 9.30.2019 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**
12.4% 6.7x 2.6x 14.3x 11.9x
6.8% 4.9x 3.2x 20.1x -
ROC 5 Year Avg 12.4% 6.8%
Cash Interest Coverage 6.7x 4.9x
Debt/EBITDA 2.6x 3.2x
Forecasted P/E** 14.3x 20.1x
P/Normalized Earnings** 11.9x -
Period Ending: 9.30.2019 * 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
44 0.6 - 8.5 3.4 37%
1,402 0.003 - 5.5 2.0 -
# Holdings 44 1,402
Market Cap ($B) Range 0.6 - 8.5 0.003 - 5.5
Market Cap ($B) Wtd Avg 3.4 2.0
Annual Turnover 37% -
Source: Factset and Russell®

Top 10 Holdings1

Winnebago Industries 4.6%
Helen of Troy 3.9%
PGT Innovations 3.8%
Schweitzer-Mauduit International 3.6%
Plexus 3.6%
Steelcase 3.3%
Colfax 3.2%
Reliance Steel & Aluminum 3.1%
Air Lease 2.9%
TCF Financial 2.9%

Top 10 Holdings1

Winnebago Industries 4.6%
Helen of Troy 3.9%
PGT Innovations 3.8%
Schweitzer-Mauduit International 3.6%
Plexus 3.6%
Steelcase 3.3%
Colfax 3.2%
Reliance Steel & Aluminum 3.1%
Air Lease 2.9%
TCF Financial 2.9%

Sector Weights1

  • C&B Small Cap Value
  • Russell 2000® Value Index
  • Communication Services

    C&B Small Cap Value
    Russell 2000® Value Index
    2.4%
  • Consumer Discretionary

    C&B Small Cap Value
    19.4%
    Russell 2000® Value Index
    9.9%
  • Consumer Staples

    C&B Small Cap Value
    Russell 2000® Value Index
    2.6%
  • Energy

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

    C&B Small Cap Value
    17.0%
    Russell 2000® Value Index
    30.5%
  • Health Care

    C&B Small Cap Value
    8.8%
    Russell 2000® Value Index
    4.9%
  • Industrials

    C&B Small Cap Value
    33.5%
    Russell 2000® Value Index
    12.6%
  • Information Technology

    C&B Small Cap Value
    6.9%
    Russell 2000® Value Index
    8.6%
  • Materials

    C&B Small Cap Value
    9.1%
    Russell 2000® Value Index
    4.5%
  • Real Estate

    C&B Small Cap Value
    Russell 2000® Value Index
    11.5%
  • Utilities

    C&B Small Cap Value
    Russell 2000® Value Index
    6.5%
  • Cash

    C&B Small Cap Value
    5.2%
    Russell 2000® Value Index
Source: Factset and Russell®

Market Commentary

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Though investors seem outwardly skittish, the third quarter’s procession of headlines – each one conceivably unsettling enough to derail this longest-ever bull market – came and went with fairly little consequence. 

The Russell 2000® Value Index (RUJ) generated a -0.57% return, despite a major disruption in the global oil supply, a prolonged trade dispute between the world’s largest economies, renewed and amplified appeals for presidential impeachment, and turmoil in the repo market. But much like last quarter – indeed much like the last 15 years – Q3 felt more tempestuous than its point-to-point return would indicate and revealed new opportunities for patient investors.

Additional Cooke & Bieler Small Cap Value Disclosures