The Columbia Focused Mid Cap Value team seeks to invest in a concentrated portfolio of undervalued companies with improving fundamentals. Value is broadly defined as price-to-earnings levels below the general market. The underlying belief is that over time the stock market rewards these types of companies.
Investment candidates generally have market capitalizations in the range of companies within in the Russell Mid Cap Value Index, and price-to-earnings multiples below the market, industry, or the company's historical multiple. Candidates will also have a specifically-defined catalyst for earnings acceleration, which may include new management, restructuring, a change in their business cycle, or changing industry fundamentals. Fundamental analysis seeks to identify the trajectory of the company and its stock 24 months out. The team's goal is to anticipate change early and allow sufficient time for a company to improve.
The portfolio is composed of 30 - 50 stocks with a maximum individual position size of 5% at the time of purchase - positions are generally trimmed back when they reach 7% of the total market value of the portfolio.
Benchmark: Russell Mid Cap Value Index