Wingate's ("WAML") Small-to Mid-Cap Equity invests in a select number of out-of-favor and/or under-followed small- and mid-cap companies without using leverage or shorting. The strategy invests in eight to 15 companies typically with a long-term, three-to-five year horizon. Investments are typically sold if they appreciate above estimated intrinsic value*.
We maintain a disciplined investment process and use demanding criteria to select a group of well-positioned companies that are trading at a substantial discount to our estimate of intrinsic value. We perform extensive due diligence on each portfolio company and we concentrate investments in companies and industries we know and understand, including information services and software, outsourced business services, cable television and programming, manufacturers or distributors of consumer products, and financial services. After we make an investment, we monitor it through ongoing discussions with industry participants and an active dialogue with the company’s management team.
Investment Criteria
We believe companies that possess the following business, management, financial, and valuation attributes are well positioned to create value for shareholders through varying economic and market environments.
Business Attributes
- Essential products and services
- High customer loyalty
- Sustainable competitive advantages
- High levels of recurring revenues
- High returns on invested capital
Management Attributes
- Strong operators with integrity
- Favorable capital allocation
Financial Attributes
- Strong balance sheet and free cash flow
Valuation Attributes
- Intrinsic value* determined through conservative forecasts
*WAML’s estimate of the present value of the cash that a business can generate and distribute to shareholders over its remaining life.
-The strategy may assume large positions in a small number of issuers which can increase the potential for greater price fluctuation.
-Investing in small or medium sized companies typically exhibit greater risk and higher volatility than larger, more established companies.
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