DISCOVERING VALUE
SKBA brings the investor a strategic array of value-based investment solutions, backed by perspective, process & performance. Our objective is to outperform our benchmarks while maintaining appropriate risk exposure.
Socially Responsible Value (SRV), a value-oriented investment philosophy, seeks to achieve long-term capital appreciation by investing in a diversified portfolio of undervalued equity securities while meeting our clientsʼ social screening criteria.
The strategy utilizes the firmʼs established value approaches to select securities from a socially screened universe of approximately 800 companies from which SKBA selects individual securities for inclusion into a diversified portfolio.
OUR APPROACH
SKBA begins with a socially screened universe of equity securities traded on a major U.S. Exchange with a market capitalization greater than $1 billion, using external social research services for the social screens.
Next our valuation filters evaluate the Relative Market Capitalization to Revenues (RMCR) & Relative Dividend Yield (RDY) of each company in relation to our market universes and to that companyʼs history. Companies passed through both the social screens & our valuation filters provide a diverse group of investment names from which to begin our research process.
We then determine a companyʼs earnings power -- its long-term ability to generate profit for reinvestment or distribution to shareholders. We focus on factors such as balance sheet & income statement strength, competitive position & overall industry prospects, as well as managementʼs alignment with shareholdersʼ interests. Our research process determines if an investment offers sufficient return potential.
SELL DISCIPLINE
We will sell a security when:
- Stock reaches valuation extreme
- We expect or observe a long-term deterioration of fundamentals
- We identify more compelling investment ideas
- The stock weighting exceeds 5% of portfolio
- Companyʼs social profile deteriorates
PORTFOLIO CONSTRUCTION
Our objective is to construct a portfolio of 40-60 stocks, diversified by sector to control risk. Our bottom up approach to stock selection highlights industries and sectors with the most attractive values. Sector weights are reviewed when they reach the greater of 10% of the portfolio or two times the Russell 1000 Value Index.
STRATEGY TEAM MEMBERS
Andrew W. Bischel, MBA, CFA
Kenneth J. Kaplan, MBA, CFA
Josh J. Rothé, MBA
Matthew D. Zuck, MBA, CFA