About Us | Core Equity Portfolio
Core Equity Portfolio
When managing core equities, Charter Oak seeks to deliver consistent and predictable
returns over the benchmarks of the Russell 3000 Value Index and S&P 500.
Charter Oak applies a traditional disciplined investment process to search for
companies of all sizes which we believe will provide excess returns in any market.
Typically, Charter Oak is contrarian in its approach, selecting companies that are
currently oversold or out of favor. We target stocks that we believe have safety nets
limiting downside risk while possessing the potential for above average growth.
Only our best ideas make it to the core equity portfolio. Therefore, this focused list of
securities usually consist of 30 to 50 stocks.
- We target strong management teams in attractive industries with proven records
- We seek strong financial profiles
- Companies that trade at the low end of historical price/earnings, price/book,
value, and price/cash flow ranges
- Companies with strong competitive advantages
- Trade a discount to their peer group— e.g., growth at a reasonable price
Stock Selection Process
- Investment Universe – Companies of all sizes, focusing on stocks with low prices relative to earnings, cash flows and book values (approximately 3,600 stocks)
- Quantitative Screens – Screen for companies that meet value criteria and have safety nets (500 stocks)
- Watch List – Monitor stocks that meet initial valuation parameters, determine candidates for further analysis based on current portfolio positioning and market conditions (250 stocks)
- Fundamental Analysis – Extensive due diligence regarding business model, financial profile, competitive advantage, industry dynamics (100 stocks)
- Portfolio – Construct a diversified portfolio that offers upside potential with limited downside risk (30-50 stocks)
