SMID Cap Value Q3 2022


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40 to 50

companies in our fully invested, concentrated portfolio

$1.2 to $16.9

billion market capitalization range at initial purchase**

18

year track record

$350

million SMID Cap Value assets under management as of 9/30/2022

$1.2

billion AUM capacity, assuming no net inflows into other strategies

  • 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 2022

Equity Composite Performance

  • Cooke & Bieler - Gross of Fees
  • Cooke & Bieler - Net of Fees
  • Russell 2500™ Value Index
Annualized Returns As of 9.30.2022 Source: Factset and Russell® Past performance is not indicative of future results. All investing involves risk, including loss of principal. 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 (Wtd. Harm. Avg.) P/Normalized Earnings (Wtd. Harm. Avg.)
11.2% 7.7x 3.4x 9.8x 9.4x
6.1% 5.4x 3.1x 14.0x -
ROC 5 Year Avg 11.2% 6.1%
Cash Interest Coverage 7.7x 5.4x
Debt/EBITDA 3.4x 3.1x
Forecasted P/E (Wtd. Harm. Avg.) 9.8x 14.0x
P/Normalized Earnings (Wtd. Harm. Avg.) 9.4x -
Period Ending: 9.30.2022 * 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 - 16.8 5.3 26%
1,830 0.01 - 18.2 5.6 -
# Holdings 45 1,830
Market Cap ($B) Range 0.6 - 16.8 0.01 - 18.2
Market Cap ($B) (Wtd. Avg.) 5.3 5.6
Annual Turnover 26% -
Source: Factset and Russell®

Top 10 Holdings1

Winnebago 3.4%
Arrow Electronics 3.3%
Arch Capital 3.2%
Gildan Activewear 3.1%
Globe Life 3.0%
ReniassanceRe 2.8%
PGT Innovations 2.7%
Essent 2.7%
AerCap 2.7%
FirstCash 2.7%

Top 10 Holdings1

Winnebago 3.4%
Arrow Electronics 3.3%
Arch Capital 3.2%
Gildan Activewear 3.1%
Globe Life 3.0%
ReniassanceRe 2.8%
PGT Innovations 2.7%
Essent 2.7%
AerCap 2.7%
FirstCash 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
    20.6%
    Russell 2500™ Value Index
    10.3%
  • Consumer Staples

    C&B SMID Cap Value
    1.3%
    Russell 2500™ Value Index
    3.0%
  • Energy

    C&B SMID Cap Value
    Russell 2500™ Value Index
    4.6%
  • Financials

    C&B SMID Cap Value
    18.9%
    Russell 2500™ Value Index
    22.3%
  • Health Care

    C&B SMID Cap Value
    12.0%
    Russell 2500™ Value Index
    9.3%
  • Industrials

    C&B SMID Cap Value
    27.5%
    Russell 2500™ Value Index
    17.1%
  • Information Technology

    C&B SMID Cap Value
    10.5%
    Russell 2500™ Value Index
    8.9%
  • Materials

    C&B SMID Cap Value
    2.2%
    Russell 2500™ Value Index
    5.6%
  • Real Estate

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

    C&B SMID Cap Value
    1.5%
    Russell 2500™ Value Index
    4.2%
  • Cash

    C&B SMID Cap Value
    5.6%
    Russell 2500™ Value Index
Source: Factset and Russell®

Market Commentary

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U.S. equity indices posted their third consecutive quarter of negative returns. Bonds offered little sanctuary as Fed officials raised rates for the fifth time this year and 10-year Treasury yields spiked from 3% to more than 4% before settling around 3.8%. Persistently high inflation and rising interest rates united investors in their pessimism while seemingly dividing their assessment of which ostensible safe haven was best.

Cooke & Bieler’s SMID Cap Value Strategy returned -9.64% gross of fees (-9.85% net of fees), underperforming the Russell 2500™ Value Index which returned -4.50% during the third quarter.

Additional Cooke & Bieler SMID Cap Value Disclosures