RESEARCH & INVESTMENT SELECTION PROCESS

WE HAVE A SIMPLE OBJECTIVE: TO FUND YOUR LIFESTYLE AND BUILD YOUR FINANCIAL LEGACY.

RESEARCH & INVESTMENT SELECTION PROCESS

CapWealth maintains a “go anywhere” value investment approach focused primarily on domestic equity securities. Our process allows for the firm to identify securities in any sector or market that we believe will generate significant risk-adjusted returns over a long period of time while protecting against permanent loss of invested capital. 


Our approach involves considering each investment as a business owner. This drives our nontraditional definition of value investing as “give vs. get,” which ensures that for each dollar invested, we expect over a dollar of total value. Much like a business owner, we generally consider investments as long-term mechanisms to generate value. 


In a world that is increasingly focused on short-term outcomes, our greatest advantage is our ability to focus on the big picture—both at the individual investment level and at the portfolio management level.


While each portfolio is customized to the changing needs of each client, our general strategy is to make meaningful investments in high-quality, predictable businesses that can be expected to grow intrinsic value at high rates and are currently available at fair or discounted prices.

INVESTMENT APPROACH

  • Sector Review

    Routine diligence across all sectors to identify industry themes. Look for strengthening or transitioning sectors, which generally provide natural catalysts.

  • Idea Generation

    Employ blue-sky approach across potential instruments that we believe may generate high risk-adjusted returns.

  • Due Diligence

    Understand business/investments and key drivers to value.

  • Benchmark/Test

    Underwrite valuation against worst-case scenarios.

  • Trade Execution

    Determine position and allocation strategy across models. Apply best execution for (block) trading via timely and efficient allocation to participating accounts.

  • Sector Review

    Routine diligence across all sectors to identify industry themes. Look for strengthening or transitioning sectors, which generally provide natural catalysts.

  • Idea Generation

    Employ blue-sky approach across potential instruments that we believe may generate high risk-adjusted returns.

  • Due Diligence

    Understand business/investments and key drivers to value.

  • Benchmark/Test

    Underwrite valuation against worst-case scenarios.

  • Trade Execution

    Determine position and allocation strategy across models. Apply best execution for (block) trading via timely and efficient allocation to participating accounts.

As owner-minded investors, we focus on the following attributes for individual securities:

Simple, predictable business

Consistent profitability (high returns on capital and free cash flow)

Long runway for future growth and reinvestment opportunities (compounding)

Sizable competitive or structural advantage

Shareholder-friendly management with high insider ownership

Strong balance sheet

Sophisticated Simplicity® works by prudently investing capital in high-quality companies at disciplined prices over long periods of time. We are acutely focused on the risk and the reward of each investment and manage all portfolios to maximize the potential return to fund your lifestyle while minimizing the level of risk.



Investing is emotional. We strive not to be. In developing a deep understanding of each of our investments and the role they play in achieving your financial targets, we give you the courage and conviction to stick with your financial plan.

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