Our Investment Strategy

Our investment selection criteria have been incorporated into our screening and decision making process. We adhere to a top-down macroeconomic focus and generally prefer two disciplines which have produced exceptional long-term investment returns:

Value investing including GARP (Growth At a Reasonable Price)*

Special situation** analysis, recognizing that there are certain client needs
to invest in growth stocks as well

* The Value Investment & GARP Approach

1. Disciplined screening for equities
1. Cash or net worth near fair market value
2. Multiples (sales, PE, total enterprise to EBITDA) below peer group
3. Out-of-favor industries, or out-of-favor companies
2. Fundamental analysis
1. Balance sheet liquidity
2. Discretionary cash flow
3. Independent credit analysis/assessment
3. Final screening
1. Meet with company management if possible

** "Special Situation" approach within undervalued securities

1. Typical catalysts may include:
1. Change in management
2. Sale or spin-off of division
3. Development of new product line or business
4. Favorable changes in regulations
5. Technological break-through
6. Emergence from bankruptcy
7. Attractive acquisition candidate

1. Special situations may require active involvement to enhance value
1. Can include ongoing correspondence with management, participation on earnings conference calls and annual meetings, or even formal board role
2. Careful selection of opportunities is critical to success
3. Significant gains have come via activist stance

Investment Vehicles

Most common vehicles used:

• Equities
• Closed-End Funds
• Publicly-Traded Limited Partnerships
• Exchange-Traded Funds (ETF’s)

Additional vehicles used:

• Domestic Master Limited Partnerships (MLP’s)
• Canadian Income Trusts
• Income Deposit Securities (IDS)
• Utilities
• Real Estate Investment Trusts (REITS)
• Covered-Call Writing, Funds, Fund of Funds