Investment Strategy

Investment Objectives

Cortland Associates is dedicated to a thorough, value-oriented approach to investing as a means of achieving superior investment results with a minimum degree of risk. This is best accomplished by investing in securities that have been thoroughly researched and which meet a series of exacting performance standards.

Investment Idea Generation

Cortland Associates' investment ideas are derived from two principal sources: proprietary research and non-Wall Street industry contacts. Basic financial statistics are evaluated such as stock price in relation to cash flow and book value, debt ratios, historical trends in gross, operating and pre-tax margins, returns on assets and returns on equity. These statistical evaluations, combined with a study of the company's fundamental business operations, afford an initial sense of the prospective investment's value relative to other investment alternatives.

Sell Discipline

A company will be reviewed and become a candidate for full or partial sale based upon one of two factors:

  • Evidence of deterioration in the fundamentals of a company or its industry.
  • If the common stock meets or exceeds our internally generated valuation level.

Company Visits

If, after preliminary review, the company remains a candidate for investment, Cortland undertakes a thorough evaluation of the company's operations in order to understand a company as an operating entity. In-depth analysis must be predicated on the knowledge of products, markets, quality of management, research and development and the tenor of competition. This requires visits to company facilities and interviews with management, employees, suppliers and competitors. Cortland seeks to discover those specific business advantages resulting from superior merchandising, proprietary technological positions, unique manufacturing efficiencies, or favored niche positions. Cortland Associates is particularly interested in the financial controls and major variables that could affect profitability.

Investment Monitoring

After an investment is made, Cortland maintains close contact with management and regularly monitors pertinent industry and economic data. The goal of analysis and review is to critically monitor a company's operations, its industry's prospects and its stock market valuation to ensure that these factors are evolving as anticipated.