“The best way to make money is to buy outstanding companies at a time when market pessimism is driving them to prices that represent compelling value. We are using any market weakness as an opportunity to buy first tier companies at cut-rate prices.” – Jeff Auxier, President
Our philosophy is based on the conviction that compounding is the most influential element of an investment program. We believe leading companies in slow growth industries often achieve the best performance over the long-term investment horizon. We look for value with a significant margin of safety relative to price. We continue to believe in a price/value strategy that helps eliminate emotional reaction to market panics.
“If you plan on being a net saver over the next few years, you should hope for a depressed stock market. Instead of being excited when stock prices rise, the true investor welcomes lower prices as an opportunity to buy quality at an attractive price.”– Jeff Auxier, President
Research and Development Process
The firm’s Principal, Jeff Auxier spends 8-10 hours daily researching annual reports, trade journals and investment publications. We evaluate domestic and international companies traded on the major exchanges using a value-oriented approach. We make asset allocation decisions based on client objectives and long term growth rather than economic forecasting. Jeff is constantly monitoring the operating fundamentals of the companies held in our client’s portfolios. He researches to find compelling, undervalued companies that ideally exhibit the following attributes:
- Strong or improving fundamentals
- Consistency in operating results
- A substantial advantage over competition (strong franchise)
- A demonstrated ability to earn high rates of return on capital
- Understandable products
- Honest, competent shareholder-oriented management
- Intelligent capital allocation policies
The investment candidates are then screened to determine what price represents good value with low risk and above average returns. We will generally diversify a portfolio with 15 to 35 positions, with a maximum 10% of portfolio value in any one position, to minimize risk.
During the research process and constant monitoring of portfolio positions AAM will tend to:
- Let winners run
- Selectively eliminate losers
- Lighten up if the fundamentals or market position deteriorates
- Sell iIf a company’s management loses their focus, consistently fails to execute, or misallocates capital
The objective is to buy and hold, and have low turnover. Therefore, selling tends to be companies that are not outperforming. The sell discipline aims to limit downside risk. We will hold a company indefinitely if the operating fundamentals continue to improve and the price is reasonable.
We look for the following characteristics when researching stocks:
- Low price/earnings
- Low price/sales
- Maximum stock weighting 10%
- Hold 15-35 core positions
- Concentration in sectors that offer the most favorable risk/reward
The minimum account size for managed accounts is $2,000,000.
Securities will be held in the client’s brokerage or bank custody account. Auxier Asset Management LLC will not retain or take possession of a client’s securities or funds.
The management fee is calculated once each quarter and is paid in advance, based upon the market value of assets under management at the end of the previous quarter. The fee applies to common stocks, fixed income securities, cash, and other securities including mutual funds. Additional fees and/or commissions may be charged by the custodian, broker, or dealer.
For further information, please request an Investment Advisory Agreement and Form ADV by contacting an AAM representative. Determine sectors with value, and then…
Research companies within the chosen sectors to identify those with the following characteristics: