Westwood SmallCap Value

The Westwood SmallCap Value strategy invests in approximately 50-70 companies with market capitalizations between $100 million – $2 billion at the time of purchase. The portfolio team seeks high quality companies with attractive valuations and expectations for future profitability to be significantly higher than what the current prices discount.

Buy discipline

The SmallCap portfolio limits the selection universe to companies with market capitalizations above $100 million. Westwood’s investment process is designed to generate superior risk-adjusted returns through bottom-up, value-based stock selection. 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
• 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

Performance

(As of 3/31/2013)

Click to download composite performance details.

“Past performance is not a guarantee of future returns. Returns are preliminary and are subject to change. Click here for the performance disclosure. The disclosures provided are considered an integral part of this presentation.”

More information

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Portfolio team