ABIM Flexible Value Philosophy: Value-Driven Yet Flexible
ABIM is driven by an investment philosophy defined as Flexible Value. "Flexible" because we adapt to the ever-changing investment market; "Value" because we want the most for our investment dollar.
Our Flexible Value philosophy is built on sound principles and seasoned judgment rather than rigid rules. This enables us to broaden the field of potential investments, identify different types of opportunities and respond quickly. At ABIM, we are not restrained by investment style or industry sectors. Rather, we focus on finding attractive price-to-value relationships in strong or improving companies with shareholder-oriented management teams, sustainable competitive advantages and strong free cash-flow.
Our clients enjoy the benefits of:
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A consistent approach over time;
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A wider range of investment opportunities; and
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Low turnover, resulting in lower transaction costs and greater tax efficiency
This is what we do:
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We perform in-depth fundamental research on companies before we invest.
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We focus on long-term opportunities created by short-term uncertainties
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We follow straightforward investment criteria, looking for undervalued, undiscovered or temporarily out-of-favor stocks.
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We seek a margin of safety in all of our investments.
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We primarily invest in stocks and bonds of large- and mid-capitalization companies
Specifically, we look for good businesses whose shares are undervalued in the market – whose stocks are down-in-price or temporarily out-of-favor. We also like to see a catalyst for positive change such as a new management, a new product or a change in industry conditions that should lead to price appreciation.
We invest in strong or improving businesses because the longer one owns a company; the more the investment results are determined by the results of the company rather than the initial price one pays to own it. In identifying good businesses, we are particularly interested in the sustainable competitive advantages and the free cash flow a business generates.
We focus intensely on finding managers that are both capable and shareholder-oriented. We have found that managers who think and act like owners – as opposed to caretakers or empire builders – make the best decisions for their shareholders. Good managers know where their dollars are spent and the return they are earning on their capital. They have common sense, are often innovative, and can motivate their employees. Often these managers have substantial stock ownership, which gives us a sense that they are “tied to the mast.” We also like managers who are willing to buy back company stock with free cash flow. We are looking for managers that “walk the walk” not just “talk the talk.”