U.S. Value Equity Team

Capital Stewardship Focus

We believe that management teams that are good stewards of capital and employ it efficiently will grow their business over time and create shareholder value.

WHAT WE BELIEVE

We believe that successful companies possess superior capital stewardship, characterized by strong cash flow generation, improving or sustainable return on invested capital (ROIC), and shareholder-value focused management teams. Investing in these companies may provide downside protection.

Proprietary company-specific modeling and valuation work:

  • Helps gauge management’s historical record of capital stewardship
  • Highlights future opportunities for management to create shareholder value
  • Helps us develop strict price targets where we seek to buy stocks trading at 70% of our one-year price target

And our sector neutral approach allows us to focus on investing in the best stocks within each sector.

WHY THIS MATTERS

Small-cap companies often have an inherent goal to become larger, but it is important to gauge returns on various strategies in the achievement of that goal. Although acquisitions can help a company get larger, overpaying for acquisitions is not in the best interests of shareholders. When evaluating sustainable shareholder value creation, investors should analyze returns on capital deployment across all possible strategies including acquisitions, reinvesting in organic growth opportunities, stock buybacks, and paying down debt.

SEE WILLIAM BLAIR’S U.S. VALUE EQUITY STRATEGIES

Small-Mid Cap Value
Relative value strategy invested in a portfolio of small- and mid-cap companies that seeks to provide attractive long-term investment returns with lower levels of risk. LEARN MORE

Small Cap Value
Relative value strategy invested in a portfolio of small-cap companies that seeks to provide attractive long-term investment returns with lower levels of risk. LEARN MORE

We strive to invest in companies that are focused on growing the right way and are generally growing their free cash flow and return on invested capital. We believe management teams that are good stewards of capital and employ it efficiently will grow their business over time and create shareholder value. If management struggles to find a good use for the company’s excess capital, they are  better off being disciplined until the right opportunity comes around or returning the excess capital to shareholders so they can employ it as they see fit.

BALANCING VALUATION AND FUNDAMENTALS

KEY TAKEAWAY

We believe many investors place too much weight on one or the other to the detriment of investment success, and believe our valuation analysis and free cash flow return on invested capital analysis helps us strike this balance appropriately.

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Our active ownership culture creates long-term client relationships by aligning with your interests and helping you achieve successful investment outcomes. Contact us to learn how we can partner with you.

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