Deep Value Strategy
A Pure Deep Value Approach to Equities
Why Deep Value Strategy?
Absolute Value Return Focus: A company-specific event, cyclical business occurrence or temporary change in industry dynamics could lead to market dislocations. We invest in out-of-favor securities that are trading at very low valuation levels – whose current market price is significantly undervalued. Investment candidates, at the time of purchase, will have a current market price approximately half of their calculated 3/5 year intrinsic value.
Patience and Discipline: We stick to the principles of our systematic investment approach that have been tested through various market cycles. We analyze each company along quantitative and qualitative factors, focusing on the reward/risk assessment for and understanding the Margin of Safety of each investment.
Bottom Up Construction: We build portfolios from the bottom up, weighting securities based on the reward/risk profiles. We believe this allows us to achieve the portfolio best designed for long-term outperformance, as opposed to strategies limited by sector, industry or other restrictions.
Ignore Market Noise: The markets are increasingly focused on short-term movements or “noise”, providing opportunities to investors, like us, focused on long-term value.
Return to Active Management: Investors impatient with passive strategies that consistently underperform are turning to active managers to meet long-term investment objectives. We have a long history of actively managing our strategies, never veering from our approach.
Attractive Portfolio Valuation: Valuation characteristics near all-time absolute lows and historical discount to the overall marketplace. Overall portfolio valuation discount to the market is typically 40-70%.
3Q 2018 Portfolio Snapshot
All data as of 9/30/2018
Total # Holdings: 48
% in Top 10 Holdings: 43.2%
Active Share: 98.1%
|Valuation Characteristics||Deep Value||S&P 500|
|Free Cash Flow (FCF) Yield||17.6%||6.6%|
|Weighted Average Market Capitalization||$12.8B||$247.5B|
Equity Sector Breakdown
- Deep Value Strategy
- S&P 500
Source: Thomson Reuters, FactSet. Representative portfolio characteristics and sector weightings are subject to change at any time. Sector weightings and portfolio characteristics of individual client portfolios may differ, sometimes significantly, from those shown.
This information does not constitute, and should not be construed as, investment advice or recommendations with respect to the securities and sectors listed. All investments are subject to risk, including the possible loss of principal. There is no guarantee investment objectives will be met. Neither Miller Value Partners, LLC nor its information providers are responsible for any damages or losses arising from any use of this information.