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There are often many investment opportunities in undervalued large-cap US companies across all industries. The best of those opportunities are in the equities of companies that show long-term competitiveness and profitability. The US equity market is reasonably efficient but emotional enough to provide opportunities for disciplined investors. In an environment where liquidity is abundant and money is cheap, it can be allocated with somewhat less discipline. When liquidity is contracting and money is more expensive, investors are more discriminating with their stock-picking and care more about valuations.
AJO is an independent, entrepreneurially driven investment adviser founded in 1984 by Ted Aronson. The firm is a limited partnership that is wholly employee-owned by seventeen active principals. While being value-oriented, the team believes superior results are best achieved by considering not only value, but also management, momentum and sentiment. Security analysis is more productive when value is gauged in relation to a company’s peers. Valuing portfolio components and diversifying among industry peer groups therefore constitute core pillars of the process. AJO focuses on well-managed companies with quality cash profits, relatively low market valuations, positive price and earnings momentum, and favourable market sentiment. The investment strategy is optimised to diversify the multi-faceted risks in US equities.
Theodore R. Aronson is the Managing Principal of AJO, having founded the firm nearly 35 years ago. He holds a BSc and an MBA and is the former chair of the CFA Institute (formerly AIMR) and a Chartered Investment Counselor.
Adams Funds is an independent, entrepreneurially driven investment adviser focusing on small-cap US equities. Small caps have distinct risk–return characteristics that can enhance portfolio performance over time. They are also more nimble and quicker to adjust their strategies in response to market changes than larger companies. The investment strategy is based on the combination of a quantitative model and fundamental research. The process overlays control measures and limits allocations to sectors and industry groups, and individual stocks. The team uses the quant model to narrow the focus and then apply fundamental analysis. The fund benefits from the leverage that comes from the model’s view over the entire market while adding value with the depth of fundamental research on the names that will be selected.
Mark Stoeckle is the Chief Executive Officer and Senior Portfolio Manager with more than 35 years of business experience. He has held several positions in international asset management and advisory companies and holds a BA and an MBA.