Things that Lead to a

Lasting Relationship

with a Stock10

Low Price

to Earnings1

Stocks with low price-to-earnings

ratios historically have

outperformed the overall market

and provided investors with less

downside risk than other equity

investment strategies.

Low Price to Cash Flow2 Strong cash flows give a company greater financial

flexibility. When paired with capable management, it

can be the foundation for stronger earnings and higher

stock prices.

Low Price to

Book Value

3

When a stock’s price is low in

comparison to the company’s book

value, sentiment about the company or

the sector may be overly negative.

Potential downside risk protection

makes low price-to-book value

stocks attractive.

Value of the

Company4

We seek to appraise the true

intrinsic value of each company

we evaluate. Our goal is to

make prudent investments by

purchasing stocks when they

trade at a significant discount to

our estimate of their true value.

Financial Soundness

5We prefer companies with limited long-term debt.

Low-debt companies have more flexibility during

adverse business conditions because they can direct

cash to operations rather than interest expenses.

Catalysts for Recognition6We consider consumer, political, environmental, and

other impacts and trends to determine whether a

company has a specific catalyst that we believe will

cause its stock price to rise.

Capable

Management &

Insider Ownership7

We generally have more than 1,000 meetings

with company management teams each year to

help us assess the strength of a company’s

leadership. We pair this evaluation with

information about any significant or increasing

stock ownership among a company’s officers

and directors because meaningful insider

ownership can signal management’s personal

confidence in the business. Insider ownership

also aligns leadership’s long-term interests with

those of shareholders.

Sound

Business

Strategy8

We seek to understand a

company’s business strategy by

meeting with its management team,

and we generally have more than

1,000 of these meetings each year.

It’s also common for us to gather

opinions from customers, suppliers,

and competitors.

Positive Earnings Dynamics

9

Earnings tend to drive stock prices. We prefer companies that recently have

demonstrated improved earnings and that have upwardly trending estimates.

Positive

Technical

Analysis10

A stock’s historic and more recent price

movements can help determine future

changes. We prefer stocks that are

trading within a narrow price range

following a previous down trend.

Learn more

about our 10

Principles of

Value Investing™

Past performance does not guarantee future results.

The statements and opinions expressed in the articles or appearances are those of the

presenter. Any discussion of investments and investment strategies represents the presenters'

views as of the date created and are subject to change without notice. The opinions expressed

are for general information only and are not intended to provide specific advice or

recommendations for any individual. Any forecasts may not prove to be true.

Economic predictions are based on estimates and are subject to change.

Value investments are subject to the risk that their intrinsic value may not be recognized by the

broad market.