Mid Cap Value Q3 2020


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40 to 50

companies in our fully invested, concentrated portfolio

22

year track record

$2.8

billion Mid Cap Value assets under management as of 9/30/2020

103%

upside market capture ratio since 2000

87%

downside market capture ratio since 2000

  • 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

Mid Cap Value

Quarter 3 2020

Equity Composite Performance

  • Cooke & Bieler - Gross of Fees
  • Cooke & Bieler - Net of Fees
  • Russell Midcap® Value Index
Annualized Returns As of 9.30.2020 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 Forecasted P/E** P/Normalized Earnings**
13.1% 10.1x 2.7x 16.2x 11.4x
9.8% 7.1x 3.5x 27.1x -
ROC 5 Year Avg 13.1% 9.8%
Cash Interest Coverage 10.1x 7.1x
Debt/EBITDA 2.7x 3.5x
Forecasted P/E** 16.2x 27.1x
P/Normalized Earnings** 11.4x -
Period Ending: 9.30.2020 * 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 1.0 - 55.4 10.4 34%
697 0.7 - 36.2 15.4 -
# Holdings 48 697
Market Cap ($B) Range 1.0 - 55.4 0.7 - 36.2
Market Cap ($B) Wtd Avg 10.4 15.4
Annual Turnover 34% -
Source: Factset and Russell®

Top 10 Holdings1

American Eagle Outfitters 3.6%
Arrow Electronics 3.4%
Helen of Troy 3.0%
Gildan Activewear 2.8%
Whirlpool 2.8%
IAA 2.6%
Alleghany 2.6%
Synchrony Financial 2.6%
Colfax 2.6%
Essent Group 2.6%

Top 10 Holdings1

American Eagle Outfitters 3.6%
Arrow Electronics 3.4%
Helen of Troy 3.0%
Gildan Activewear 2.8%
Whirlpool 2.8%
IAA 2.6%
Alleghany 2.6%
Synchrony Financial 2.6%
Colfax 2.6%
Essent Group 2.6%

Sector Weights1

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

    C&B Mid Cap Value
    1.7%
    Russell Midcap® Value Index
    4.1%
  • Consumer Discretionary

    C&B Mid Cap Value
    16.0%
    Russell Midcap® Value Index
    12.0%
  • Consumer Staples

    C&B Mid Cap Value
    Russell Midcap® Value Index
    4.4%
  • Energy

    C&B Mid Cap Value
    Russell Midcap® Value Index
    3.4%
  • Financials

    C&B Mid Cap Value
    23.8%
    Russell Midcap® Value Index
    14.8%
  • Health Care

    C&B Mid Cap Value
    11.4%
    Russell Midcap® Value Index
    7.9%
  • Industrials

    C&B Mid Cap Value
    27.2%
    Russell Midcap® Value Index
    17.4%
  • Information Technology

    C&B Mid Cap Value
    11.4%
    Russell Midcap® Value Index
    9.6%
  • Materials

    C&B Mid Cap Value
    4.8%
    Russell Midcap® Value Index
    7.1%
  • Real Estate

    C&B Mid Cap Value
    1.8%
    Russell Midcap® Value Index
    10.4%
  • Utilities

    C&B Mid Cap Value
    Russell Midcap® Value Index
    9.0%
  • Cash

    C&B Mid Cap Value
    1.9%
    Russell Midcap® Value Index
Source: Factset and Russell®

Market Commentary

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U.S. equity markets continued higher in the third quarter on the heels of further government stimulus, improving economic data, encouraging readouts from COVID-19 vaccine trials, and better clinical outcomes for COVID-19 patients. Though the trend reversed in September, growth stocks again led the charge, with the Russell Midcap® Growth Index up 9.37% for the three-month period versus 6.40% for the Russell Midcap® Value Index.

The third quarter was difficult for active managers and mid cap value managers in particular struggled to keep pace, with only 6% beating the benchmark. Cooke & Bieler’s Mid Cap Value Strategy returned 4.77% gross of fees (4.58% net of fees), underperforming the Russell Midcap® Value Index.

Additional Cooke & Bieler Mid Cap Value Disclosures