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Klingenstein, Fields & Co.’s investment decisions are supported by an internal qualitative and quantitative research team and investment committee, company management meetings, independent boutique research and the traditional “sell side” Wall Street research. Our research process is driven by:
- Disciplined valuation focus
- Research intensive, fundamentally driven approach
- Search for limited risk, low volatility
- Low portfolio turnover and transaction costs
- No pressure to be fully invested
Using a team approach for investment selection, we seek to invest in leading companies in industries that are likely to expand faster than others through both:
- “Top down approach,” monitoring global trends and identifying sectors likely to have strong secular growth, and
- “Bottom up approach,” seeking stocks that we believe are attractively priced by the market relative to our estimates of inherent value, absolute levels of demonstrable earnings and future earnings growth.
Investment Focus
- Equity portfolios of listed, marketable securities
- Fixed income investments in high-grade corporate, treasuries, and municipal bonds
- We seek to invest in companies within industries that are likely to expand faster than others, purchased at reasonable valuations.
- Unrecognized intrinsic value
- Quality management team
- Expanding product line and pricing power
- Strong balance sheet
Idea Generation
- Thematic: out of favor, secular global trends, industry, geography, sector
- Meet or speak with > 250 management teams per year
- Construct targeted valuation screens
- Leverage relationships with industry experts
- Maintain idea inventory list
- Draw from cache of historical KF&Co. investments
Qualitative and Quantitative Analysis
- Define investment position: assess business quality and long-term catalysts
- Interview management, visit companies
- Determine appreciation targets and define potential risks to investment thesis
- Analyze audited financial statements
- Create proprietary financial valuation models based on cash flow projections, comparable analysis, and sum of the parts values
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