Equity Management

We use our analyses of global economics and the business cycle when designing the strategies for our equity and balanced accounts.  Our expectations for the global economy determine the kinds of companies that we purchase as well as the conditions under which we will sell.  Our analysis of the business cycle also determines the kinds of companies that we buy for our accounts.  For instance, when we expect a change in the business cycle, both positive and negative, the stocks in both of our styles are generally very similar because at turning points in the cycle, only narrow groups of stocks perform well.

Value is the common denominator of both our styles of investment.  By value, we mean that we are interested in owning stocks that are trading at prices that are less than the values we ascribe to them at GeoVest based on some objective measure such as the worth of a company’s assets, their ability to generate cash flow or an expectation for faster growth in earnings than is commonly believed in the market. 

Styles of Equity Management

Value Strategy

Clients that choose this strategy are generally looking for long term growth in their portfolios but with less volatility than a normal market portfolio.  Securities selected for this strategy are stocks of companies which may be temporarily out of favor in the market but which have good long-term prospects. These are generally large capitalization companies with long histories in many business climates and with generally broad product lines. They might exhibit lower price to book, price to earnings, price to revenue, or price to expected growth ratios than the general market at time of purchase.

Value/Growth Strategy

Clients that choose this strategy are generally looking for stronger long term growth in their portfolios and don’t mind the extra volatility necessary to achieve that goal.  Securities selected for this strategy may include companies in our Value Strategy but also include companies from industries that are expected to grow faster than the economy as a whole. Our valuation parameters for these stocks generally involve discounting our forecasted growth in earnings for these securities.  Stocks of these companies may be concentrated in specific industry groups and are likely to exhibit higher volatilities of return than a more industry-diversified group of securities.