Our stock selection process is based on our philosophy that we can achieve consistent, superior long-term results by building portfolios of high quality, undervalued companies possessing exceptional management and financial characteristics. To be considered for purchase, a company must also possess a catalyst, which improves the potential for increased shareholder wealth. Our process emphasizes in-house fundamental research and the experience of our investment professionals in identifying these opportunities.

Equity Portfolio Philosophy
• We focus on the company as equity stakeholders, not just its stock
• The company’s management: capable, focused on the shareholder
• The company’s balance sheet: strong, with good cash flow, appropriate leverage
• The company’s profits: reinvested productively
• The company’s business: large, stable, yet still growing

We seek companies with strong balance sheets and with comparatively low price/earnings, price/cash flow, and price/book valuation ratios. Stocks are purchased if they are trading significantly below our estimate of fair value. This conservative approach seeks to provide investors with both a margin of safety and significant long-term appreciation potential.

Equity Selection Process
Needelman Asset Management specializes in the management of large capitalization value oriented portfolios.

Step 1: Screen for Value

  • Low P/E, low Price/Book (relative basis)
  • Emphasis on sustainable, growing, dividend payments
  • Capitalization of at least $5 billion

Step 2: Apply Fundamental Analysis

  • Analyze the quality of the company’s management, its balance sheet, the business itself and the strategic business plan
  • Determine a catalyst, existing or potential, such as: dividend increases, stock repurchases, corporate restructurings, mergers and acquisitions, changes in business strategy

Step 3: Construct the Portfolio

  • 25-35 equity issues
  • No more than 5% in any one issue at time of purchase
  • No more than 20% in any one industry at time of purchase
  • Broad diversification by industry and sector
  • Accommodate client specific guidelines and restrictions

Step 4: Sell to Take Profits, Protect Principal

  • Stocks are monitored, reviewed and sold:
  • When the stock’s upside price objective is reached
  • In order to make room for new opportunities
  • When fundamental and/or technical factors deteriorate from original expectations
  • When continuing analysis suggests a shift out of a particular sector or industry