companies in our fully invested, concentrated portfolio
billion market capitalization range at initial purchase**
year track record
million SMID Cap Value assets under management as of 9/30/2024
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 2024
Equity Composite Performance
- Cooke & Bieler - Gross of Fees
- Cooke & Bieler - Net of Fees
- Russell 2500™ Value Index
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.) |
|---|---|---|---|---|
| 11.7% | 6.3x | 2.5x | 14.8x | 12.2x |
| 6.4% | 4.4x | 2.9x | 20.0x | - |
| ROC 5 Year Avg | 11.7% | 6.4% |
|---|---|---|
| Cash Interest Coverage | 6.3x | 4.4x |
| Debt/EBITDA | 2.5x | 2.9x |
| Forecasted P/E (Wtd. Harm. Avg.) | 14.8x | 20.0x |
| P/Normalized Earnings (Wtd. Harm. Avg.) | 12.2x | - |
Portfolio Attributes1
- C&B SMID Cap Value
- Russell 2500™ Value Index
| # Holdings | Market Cap ($B) Range | Market Cap ($B) (Wtd. Avg.) | Annual Turnover |
|---|---|---|---|
| 47 | 0.5 - 21.5 | 8.7 | 30% |
| 1,887 | 0.0 - 21.1 | 7.8 | - |
| # Holdings | 47 | 1,887 |
|---|---|---|
| Market Cap ($B) Range | 0.5 - 21.5 | 0.0 - 21.1 |
| Market Cap ($B) (Wtd. Avg.) | 8.7 | 7.8 |
| Annual Turnover | 30% | - |
Top 10 Holdings1
| Gildan Activewear | 4.5% |
| Woodward | 3.7% |
| RenaissanceRe | 3.4% |
| Teleflex | 3.1% |
| American Woodmark | 3.1% |
| Fidelity National Financial | 3.0% |
| Winnebago | 2.7% |
| Open Text | 2.6% |
| American Eagle Outfitters | 2.5% |
| Dream Finders Homes | 2.5% |
Top 10 Holdings1
| Gildan Activewear | 4.5% |
| Woodward | 3.7% |
| RenaissanceRe | 3.4% |
| Teleflex | 3.1% |
| American Woodmark | 3.1% |
| Fidelity National Financial | 3.0% |
| Winnebago | 2.7% |
| Open Text | 2.6% |
| American Eagle Outfitters | 2.5% |
| Dream Finders Homes | 2.5% |
Sector Weights1
- C&B SMID Cap Value
- Russell 2500™ Value Index
-
Communication Services
C&B SMID Cap Value 4.7% Russell 2500™ Value Index 3.7% -
Consumer Discretionary
C&B SMID Cap Value 22.4% Russell 2500™ Value Index 11.8% -
Consumer Staples
C&B SMID Cap Value 3.6% Russell 2500™ Value Index 3.5% -
Energy
C&B SMID Cap Value 1.9% Russell 2500™ Value Index 5.4% -
Financials
C&B SMID Cap Value 13.6% Russell 2500™ Value Index 20.3% -
Health Care
C&B SMID Cap Value 10.5% Russell 2500™ Value Index 8.3% -
Industrials
C&B SMID Cap Value 31.9% Russell 2500™ Value Index 18.4% -
Information Technology
C&B SMID Cap Value 6.2% Russell 2500™ Value Index 7.8% -
Materials
C&B SMID Cap Value — Russell 2500™ Value Index 7.2% -
Real Estate
C&B SMID Cap Value — Russell 2500™ Value Index 10.1% -
Utilities
C&B SMID Cap Value 2.4% Russell 2500™ Value Index 3.5% -
Cash
C&B SMID Cap Value 2.8% Russell 2500™ Value Index —
Additional Cooke & Bieler SMID Cap Value Disclosures
SMID Cap Value Equity Composite
| Year | Total Return Gross of Fees (%) | Total Return Net of Fees (%) | Russell 2500™ Value Index (%) | Russell 2500™ Value Index 3-Yr Std Dev (%) | Composite 3-Yr Std Dev (%) | Composite Dispersion (%) | Market Value ($Millions) | Total Firm Assets ($Millions) | # of Portfolios |
|---|---|---|---|---|---|---|---|---|---|
| 2014 | 6.44 | 5.73 | 7.11 | 11.25 | 10.95 | N/M | 17.0 | 4,921.9 | <5 |
| 2015 | -3.21 | -3.89 | -5.49 | 12.02 | 12.23 | N/M | 14.9 | 4,804.9 | <5 |
| 2016 | 27.32 | 26.44 | 25.20 | 13.17 | 13.67 | N/M | 19.1 | 5,303.4 | <5 |
| 2017 | 15.01 | 13.99 | 10.36 | 11.81 | 12.58 | N/M | 21.2 | 5,912.3 | <5 |
| 2018 | -13.27 | -14.05 | -12.36 | 13.58 | 14.61 | N/M | 19.1 | 5,084.6 | <5 |
| 2019 | 40.30 | 39.08 | 23.56 | 14.23 | 16.75 | N/M | 28.8 | 9,757.1 | <5 |
| 2020 | 4.27 | 3.34 | 4.88 | 25.05 | 27.73 | N/M | 35.6 | 9,540.8 | <5 |
| 2021 | 21.73 | 20.66 | 27.78 | 24.15 | 26.60 | N/M | 482.6 | 11,942.6 | 7 |
| 2022 | -16.86 | -17.62 | -13.08 | 26.46 | 27.01 | 0.30 | 388.8 | 10,678.1 | 11 |
| 2023 | 27.29 | 26.17 | 15.98 | 20.70 | 19.02 | 0.19 | 487.2 | 11,834.8 | 11 |
The SMID Cap Value Equity Composite has been examined for the period from January 1, 2013 through December 31, 2023. The examination report is available upon request.
The Cooke & Bieler SMID Cap Value Equity Composite (Composite) has an inception date of January 1, 2004 and includes all fully discretionary, fee paying, SMID cap value equity portfolios managed for more than one month. The Composite was created in March 2004. For investment purposes, we generally define SMID cap equity securities as those of companies whose market capitalization is within the Russell 2500™ Index at initial time of purchase. Securities are selected using the firm’s fundamental, bottom-up approach. Portfolios are concentrated, typically holding approximately 40-50 securities.
The standard fee agreement is 0.90 of 1% per annum on the first $20 million, 0.80 of 1% per annum on the next $20 million, 0.75 of 1% per annum on the next $20 million, 0.70 of 1% per annum on the remaining balance, however fees are negotiable. Effective 1/1/2017 net of fee returns are calculated monthly by deducting one twelfth of the annual model fee rate of 0.90% across all accounts in the composite. Prior to 1/1/2017, net of fee returns reflect the deduction of actual management fees. As of 12/31/23, less than 3% of composite assets are custodied with brokers that do not charge trading commissions. Accounts custodied elsewhere will incur trading expenses, which may reduce returns.
For comparison purposes, the Composite is measured against the Russell 2500™ Value Index. The Russell 2500™ Value Index returns are provided to represent the investment environment existing during the time periods shown and are not covered by the report of independent verifiers. Russell Investment Group is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell™ is a trademark of Russell Investment Group.
Cooke & Bieler Additional Disclosures
Notes:
- Cooke & Bieler, L.P. claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Cooke & Bieler has been independently verified for the periods January 1, 1993 through December 31, 2023. The verification report is available upon request. A firm that claims compliance with the GIPS standards must establish policies and procedures for complying with all the applicable requirements of the GIPS standards. Verification provides assurance on whether the firm’s policies and procedures related to composite maintenance as well as the calculation, presentation, and distribution of performance, have been designed in compliance with the GIPS standards and have been implemented on a firm‐wide basis. Verification does not provide assurance on the accuracy of any specific performance report.
- The Firm is defined as Cooke & Bieler, L.P., an independent investment management firm and is registered as an investment adviser under the Investment Advisers Act of 1940. Registration does not imply a certain level of skill or training.
- Rates of return are calculated in U.S. dollars. Portfolios are valued monthly on a trade date basis. Portfolio returns reflect the reinvestment of dividend and interest income.
- Returns are presented both gross and net of fees. Gross of fee returns do not reflect the deduction of investment advisory fees. Client returns will be reduced by investment advisory fees and other expenses they may incur in the management of their investment advisory accounts. Investment advisory fees are described in Part 2A of Form ADV. The actual fee charged is subject to negotiation and may depend on the asset size, client location, and type of portfolio.
- Dispersion is measured using an asset weighted standard deviation of portfolio gross returns represented within the Composite for the full year. For those annual periods with less than five portfolios included for the entire year, dispersion is not presented as it is not considered to be meaningful.
- A list of composite descriptions is available upon request. Policies for valuing investments, calculating performance, and preparing GIPS Reports are also available upon request.
- For comparison purposes, each index is fully invested and includes the reinvestment of income. The returns for each index do not include any transaction costs, management fees or other costs.
- The three-year annualized ex-post standard deviation measures the variability of the composite (using gross returns) and the benchmark for the preceding 36-month period.
- GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.
- Past performance is not indicative of future results. All investing involves risk, including loss of principal.
Strategy Commentary
Download Commentary
Equity markets advanced sharply in the third quarter as continuing economic momentum and solid corporate earnings growth dispelled fears of an imminent recession. At the same time, diminishing inflationary pressures stoked optimism for a more supportive monetary policy.
Cooke & Bieler’s SMID Cap Value Strategy posted strong absolute performance but lagged on a relative basis during the quarter, returning 9.39% gross of fees (9.15% net of fees) against a 9.63% return for the Russell 2500™ Value Index.