Westwood LargeCap Value
The Westwood LargeCap Value strategy invests in approximately 40-60 companies with attractive valuations. The portfolio team seeks high quality companies with prospects for future profitability that are significantly stronger than are reflected in the current stock price. Companies with ample free cash flow and low debt are preferred.
Portfolio risk is controlled by limiting the target weight of each holding, imposing maximum position limits, and limiting sector weightings. The beta of the portfolio is typically less than that of the market.
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 closely 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
The sell discipline is essential to controlling portfolio risk and includes:
- Stock achieves final price objective
- Fundamental change in company or industry that negatively impacts original investment thesis
Please contact us to learn more about this and other Westwood portfolios or to set up a meeting with a member of our team.