Mid Cap Private Market Value
Philosophy | Process | Performance
Process
Estimating intrinsic value is at the heart of every equity management strategy. A disciplined, repeatable process sets a manager up for success, while a loose intellectually inferior model for value almost guarantees underperformance. The anchor in Reinhart Partner's mid cap value strategy is intrinsic valuation methodology - Private Market Value.
Quality First - Valuation Second
Screening the Midcap Universe – 1200 Companies
Fundamental Analysis – Research Focus
Valuation Discipline
Private Market Value - The Anchor
- PMV is what an acquirer would be willing to pay
for the entire company (per share).
- PMV is derived by first observing actual takeover valuation multiples.
- We utilize different metrics by industry to capture appropriate value-drivers.
- Stock prices are more volatile than the underlying value
of the franchise, which creates unique investment opportunities.
- PMV becomes the "anchor" by which all decisions are framed within an emotional market.
- New names are purchased at a 30% discount to PMV, and stocks are sold when they reach PMV.
- The gap between price and PMV serves as an objective basis to trim or add to existing holdings.
Benefits of utilizing a PMV approach
- Objective
Measures what buyers will pay for companies.
- Disciplined
An anchor in the midst of emotional markets.
- Opportunistic
Takes advantage of market volatility.
- Custom
Applies to unique value methodology to each sector.
- Dynamic
Captures changing industry fundamentals & outlook.
- Strategic
Helps to identify key value drivers for every stock.
Experienced Portfolio Management Team
Brent Jesko has 17 years of investment experience managing mid cap and small cap portfolios
Prior experience in managing assets in excess of $6 billion
Performance Incentive Plan
Aligns managers' and clients' interests to reward long-term performance
Manager Commentary and Performance
