ABIM is driven by an investment
philosophy defined as Flexible Value. "Flexible"
because we adapt to the ever-changing investment market;
"Value" because we want the most for our investment dollar.
Our
Flexible Value philosophy is built on sound principles and
seasoned judgment rather than rigid rules. This enables
us to broaden the field of potential investments, identify
different types of opportunities and respond quickly. At
ABIM, we are not restrained by investment style or industry
sectors. Rather, we focus on finding attractive
price-to-value relationships in strong or improving companies
with shareholder-oriented management teams, sustainable
competitive advantages and strong free cash-flow.
Our clients enjoy the benefits of:
A consistent approach over time;
A wider range of
investment opportunities; and
Low turnover, resulting
in lower transaction costs and greater tax efficiency
This is what we do:
We
perform in-depth fundamental research on companies before we invest.
We focus on long-term opportunities
created by short-term uncertainties
We follow straightforward investment
criteria, looking for undervalued, undiscovered or
temporarily out-of-favor stocks.
We seek a
margin of safety in all of our investments.
We
primarily invest in stocks and bonds of large- and
mid-capitalization companies.
Specifically, we look for good businesses
whose shares are undervalued in the market – whose stocks
are down-in-price or temporarily out-of-favor. We also like
to see a catalyst for positive change such as a new management,
a new product or a change in industry conditions that should
lead to price appreciation.
We invest in strong or improving businesses because the longer
one owns a company; the more the investment results are determined
by the results of the company rather than the initial price
one pays to own it. In identifying good businesses, we are
particularly interested in the sustainable competitive advantages
and the free cash flow a business generates.
We focus intensely on finding managers that are both capable
and shareholder-oriented. We have found that managers who
think and act like owners – as opposed to caretakers or empire
builders – make the best decisions for their shareholders.
Good managers know where their dollars are spent and the return
they are earning on their capital. They have common sense,
are often innovative, and can motivate their employees. Often
these managers have substantial stock ownership, which gives
us a sense that they are “tied to the mast.” We
also like managers who are willing to buy back company stock
with free cash flow. We are looking for managers that “walk
the walk” not just “talk the talk.”
Our approach is simple, but not easy.
It takes skill and hard work to identify high-quality companies
and courage to buy them when they are out of favor. This
flexibility has earned the loyalty of our clients by providing
consistently superior long-term results over various market
cycles.
