Westwood SMidCap Value (closed to new investors)

Westwood’s SMidCap strategy is an extension of the process utilized in the LargeCap strategy. We find value in companies when we expect future profitability to be significantly higher than what the current prices discount. SMidCap focuses on investing in approximately 50-65 small and midcap securities, which are well diversified among sectors. Total portfolio risk is targeted to be less than the market.

Buy discipline

The SMidCap portfolio limits the selection universe to companies with market capitalizations between $100 million and $8 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 $10 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

Performance

(As of 3/31/2013)

“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.”

Click here for the performance disclosure. The disclosures provided are considered an integral part of this presentation.”
*Due to capacity constraints, this product closed to new investors effective October 1, 2009. Performance provided reflects the institutional track record which started January 1, 2002. In 2001, Westwood transitioned a midcap core equity strategy to the institutional SMidCap strategy. The midcap core portfolio was exclusively offered to private clients of Westwood’s Trust Company. This change occurred as a result of the increased demand we observed by institutional investors. January 1, 2002 reflects the inception of the institutional SMidCap Equity strategy. The true inception date of the composite is 7/1/97. This strategy has consistently adhered to Westwood’s investment process and philosophy.

More information

Contact us to learn more about this and other Westwood portfolios.

Portfolio team