Westwood SMidCap Plus+
Westwood’s SMidCap Value Plus+ strategy invests in approximately 45-65 small and mid cap securities across a diverse range of sectors where we expect future profitability to be significantly higher than what the current prices discount. This strategy owns approximately 80% of the same securities as the SMidCap strategy, however, a focus on securities with capitalization over $2 billion provides greater liquidity and capacity. Total portfolio risk is targeted to be less than the market.
Buy discipline
The SMidCap Plus+ portfolio limits the selection universe to companies with market capitalizations between $2 billion and $15 billion. Analysts focus on ideas that have limited downside risk and the opportunity to generate earnings/cash flows that are higher than what the current stock price implies. Companies are monitored and factors considered in analyzing securities include:
- Improving ROE (return on equity)
- A declining debt/equity ratio
- Positive cash flow
- Positive earnings surprise without a corresponding increase in Wall Street earnings estimates
Sell discipline
Companies are reviewed for sale when:
- The stock achieves the price objective
- Fundamental change in company or industry that negatively impacts original investment thesis
- Market Capitalization exceeds $15 billion
- Changes to the company’s fundamentals that make the risk/reward profile unattractive
- A formal review is conducted if a name is down 20% or more over any 30-day period
More information
Please contact us to learn more about this and other Westwood portfolios or to set up a meeting with a member of our team.