Portfolio Objective
The Forward Small-Cap Intrinsic Value portfolio utilizes an opportunistic, intrinsic value approach to provide investors with competitive, risk-adjusted returns in all market environments. The portfolio seeks to outperform in flat-to-down markets and participate in up markets. The portfolio will typically invest in 60-85 companies with market capitalizations between $200 million and $3 billion.
Investment Process
We thoroughly analyze a company to determine its true worth or intrinsic value, and compare that value to the current market valuation to determine if there exists an appropriate margin of safety for investment. Each investment idea must possess solid valuation, strong fundamentals and catalysts which help to validate the underlying investment thesis.
Key Valuation Criteria: Apply industry appropriate valuation metrics to analysis of each company. These may include:
- Low relative P/B
- Low relative P/E
- Low relative Price-to-cash flow
- Low relative P/S
- Low relative EV / EBITDA
- Below replacement value
Key Financial Criteria: Seek companies with attractive or improving fundamentals and avoid companies with weak or deteriorating fundamentals. These may include:
- Strong or improving cash flow
- High returns on invested capital
- Low relative debt levels
- Durable competitive advantage
Key Catalysts: Identify catalysts that will unlock the value of the company. These may include:
- Management change
- New product cycle
- Restructuring that improves profitability
Small-Cap Intrinsic Value Portfolio Fact Sheet
For portfolio details and performance, click here .
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