Equity Management
Like Reynders, McVeigh, our equity management process is based on our belief that stocks of well-established companies that are producing powerful earnings and an above-average opportunity for dividend growth, when purchased at a reasonable price, will provide superior returns over long periods.
We are contrarian in our discipline, investing in companies when they are out of favor in the market. We are long-term investors, not traders, and recognize the bite that taxes and transaction costs can take out of a client’s return. We believe in the power of compounding returns.
Long-term investment success requires a strategy that provides growth during times of opportunity and capital preservation in times of hardship. We invest in low-debt companies with progressive management teams that are serving areas of sure demand. Transparency in the reporting of revenues and earnings is a critical factor in our discipline; we will only invest in companies where we can reasonably assess the risks we are taking on a client’s behalf. If we cannot see how and where a company is earning its money clearly on an income statement, we will not invest.
Core stocks in our discipline can be large-cap, mid-cap or small-cap, foreign or domestic. We price individual opportunities so that the risks that may attend different levels of capitalization are recognized and constrained. Generally, the number of holdings in a portfolio will range from 30 to 40, affording ample diversification. We tend to avoid heavily regulated industries, and we are rarely correlated to S&P 500 market weightings.