SMID Cap Value Q3 2019


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40 to 50

companies in our fully invested, concentrated portfolio

15

year track record

$23

million SMID Cap Value assets under management as of 9/30/2019

104%

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 3 2019

Equity Composite Performance

  • Cooke & Bieler - Gross of Fees
  • Cooke & Bieler - Net of Fees
  • Russell 2500™ 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 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**
12.5% 6.1x 2.7x 13.7x 12.4x
7.3% 5.2x 3.2x 17.9x -
ROC 5 Year Avg 12.5% 7.3%
Cash Interest Coverage 6.1x 5.2x
Debt/EBITDA 2.7x 3.2x
Forecasted P/E** 13.7x 17.9x
P/Normalized Earnings** 12.4x -
Period Ending: 9.30.2019 * 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 - 17.8 5.6 37%
1,804 0.003 - 13.5 5.1 -
# Holdings 45 1,804
Market Cap ($B) Range 0.6 - 17.8 0.003 - 13.5
Market Cap ($B) Wtd Avg 5.6 5.1
Annual Turnover 37% -
Source: Factset and Russell®

Top 10 Holdings1

Winnebago Industries 4.6%
Arrow Electronics 3.3%
Helen of Troy 3.2%
Schweitzer-Mauduit International 3.2%
Plexus 3.1%
AerCap 2.9%
TCF Financial 2.9%
Fidelity National Financial 2.9%
Colfax 2.8%
Steelcase 2.7%

Top 10 Holdings1

Winnebago Industries 4.6%
Arrow Electronics 3.3%
Helen of Troy 3.2%
Schweitzer-Mauduit International 3.2%
Plexus 3.1%
AerCap 2.9%
TCF Financial 2.9%
Fidelity National Financial 2.9%
Colfax 2.8%
Steelcase 2.7%

Sector Weights1

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

    C&B SMID Cap Value
    Russell 2500™ Value Index
    3.1%
  • Consumer Discretionary

    C&B SMID Cap Value
    17.2%
    Russell 2500™ Value Index
    10.3%
  • Consumer Staples

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

    C&B SMID Cap Value
    Russell 2500™ Value Index
    4.3%
  • Financials

    C&B SMID Cap Value
    17.2%
    Russell 2500™ Value Index
    23.7%
  • Health Care

    C&B SMID Cap Value
    10.6%
    Russell 2500™ Value Index
    5.5%
  • Industrials

    C&B SMID Cap Value
    25.8%
    Russell 2500™ Value Index
    13.1%
  • Information Technology

    C&B SMID Cap Value
    11.6%
    Russell 2500™ Value Index
    8.8%
  • Materials

    C&B SMID Cap Value
    11.3%
    Russell 2500™ Value Index
    6.2%
  • Real Estate

    C&B SMID Cap Value
    1.9%
    Russell 2500™ Value Index
    15.3%
  • Utilities

    C&B SMID Cap Value
    Russell 2500™ Value Index
    6.3%
  • Cash

    C&B SMID Cap Value
    4.5%
    Russell 2500™ 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 2500™ Value Index (R25IV) generated a 0.13% 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 SMID Cap Value Disclosures