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GSCM Presentation Sep 2010
GSCM Presentation Sep 2010
GSCM Presentation Sep 2010
GSCM Presentation Sep 2010
GSCM Presentation Sep 2010
GSCM Presentation Sep 2010
GSCM Presentation Sep 2010
GSCM Presentation Sep 2010
GSCM Presentation Sep 2010
GSCM Presentation Sep 2010
GSCM Presentation Sep 2010
GSCM Presentation Sep 2010
GSCM Presentation Sep 2010
GSCM Presentation Sep 2010
GSCM Presentation Sep 2010
GSCM Presentation Sep 2010
GSCM Presentation Sep 2010
GSCM Presentation Sep 2010
GSCM Presentation Sep 2010
GSCM Presentation Sep 2010
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GSCM Presentation Sep 2010

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2010 Marketing Presentation

2010 Marketing Presentation

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  • 1. Investor Presentation – 2010 2100 McKinney, Suite 1420 Dallas, Texas 75201 Phone: 214-367-6170 Fax: 214-367-6180 info@gscapital.net www.gscapital.net
  • 2. Introduction Name: Greenfield Seitz Capital Management, LLC Organization: Registered Investment Advisor Location: Dallas, Texas Style: Mid/Large-Cap GARP Assets Under Management: $205 million Investment Professionals: 2 Account Minimum: $1 million Year Initially Founded: 1964 Ownership: 100% owned by Principals 1
  • 3. Introduction Investment Objective Provide US Growth Equity investors a superior a rate of return over the long- term, while simultaneously maintaining a commitment to capital preservation As thematic investors, we look to identify attractive investment themes that are not fully valued/appreciated Investment Philosophy  Independent Thought Process  Strategic Sector Allocation  Fundamentally Oriented  Focus on Outstanding Management  Steadfast Conviction In Our Ideas  Patience & Long-Term Perspective 2
  • 4. GSCM Team  Yancey Seitz joined Greenfield Seitz in 1983. Mrs. Seitz has been a principal member of Greenfield Seitz Capital Management for more than 20 years. She earned a bachelor’s degree in finance from the University of Oklahoma. Mrs. Seitz spent 20 years working with the founder of GSCM, Eric Greenfield, and has considerable experience in applying our investment process in a multitude of environments.  Stuart Greenfield, CFA joined Greenfield Seitz in 2002. His investment career started with Luther King Capital Management and later in equity research at Donaldson, Lufkin & Jenrette and Bear Stearns & Co. At DLJ, he received all-star analyst votes. After working on the sell- side, he was a Portfolio Manager at Smith Group Asset Management. Stuart graduated from Texas Christian University with a bachelor’s degree in finance and is a CFA® Charterholder. • 4-person staff has 70+ years combined investment experience • Staff has average tenure of 14 years at GSCM 3
  • 5. GSCM is Different  Experienced Team – Investment staff averages 17 years in the investment industry  Proven Process – 45 years and going strong  Tax Efficient – Superior After-Tax Returns – Low Turnover (<10% annualized)  Long Term Investment Horizon  Loyal investor base – Average client invested with GSCM more than 20 years  Internal Research  Focus on real returns and not Benchmark allocation  Conviction – Greenfield & Seitz’s family are largest investors 4 Investing involves risk and you may incur a profit or a loss. Past performance is not indicative of future results. Visit www.gscapital.net for additional disclosures.
  • 6. Size Matters: Small is Better  GSCM was named “Top Gun Manager of Decade” by PSN Informa (3/1/2010) – GSCM ranked Top 10 out of more than 1,000 managers (2000-2010) – All of the Top 10 equity managers had less than $3 billion in AUM  Numerous Academic Studies show Emerging Managers Outperformance – Passionate and Hungry – Focused on stock selection (not client relations & speaking obligations) – Multi-Billion AUM leads to small investible universe and trading difficulties  Access to Manager & Portfolio Transparency  Large does not equal lower risk – Amaranth, Absolute, Atticus, Bear Stearns, BP, Carlyle, Galleon, GLG, Highland, Lancer, Lehman Bros, Long-Term Capital, Madoff, Ospraie, Peloton, Pequot, and Sowood…… were all large & respected Research by Ted Krum (Northern Trust) “Potential Benefits of Investing with Emerging Managers” – Investors with minimum assets under management requirements often excluded top-performing managers. 40% of core U.S. equity managers in the top quartile of performance managed less than $2 billion. – Emerging investment managers outperformed larger firms at the median, as well as at the top and bottom quartile levels. This result was consistent across all major style groups and implies that manager-selection skill may be better rewarded when applied to the small-firm universe. – Small firms delivered better performance in down markets. “Almost 20 years of data show that emerging firms have been more nimble,” says Robert Furnari, managing director of Emerging Manager Programs at Northern Trust. “They can make adjustments to the portfolio in times of distress more quickly than larger firms.” 5 Investing involves risk and you may incur a profit or a loss. Past performance is not indicative of future results. Visit www.gscapital.net for additional disclosures.
  • 7. Investment Process  Proactive Idea Generation from Multiple Sources  Opportunistic, Go-Anywhere Approach  Identify Attractive Investment Themes and Industries (Top – Down)  Find Actionable Securities to Profit from Macro-Theme (Bottom – Up)  Rigorous Qualitative Analysis – Management Assessment – Industry Analysis – Identify Misperception or Catalyst  Fundamental Analysis – Proven history of EPS Growth (2 years, ideally 5+ years) – Valuation (PEG below 1.5, ideally below 1.0) – ROE (Above 20%) – Low Debt/Equity (Below 20%, ideally zero) – Balance Sheet Strength 6
  • 8. Portfolio Construction Parameters  Market Capitalization above $1 billion  Positive EPS  Trade in both U.S. common or ADR’s  Maximum International Exposure: 40%  Portfolio Holdings: 60 – 80  Maximum Position in Single Stock: 10%  Target Asset Allocation: 90% equities & 10% cash. • Will vary with tactical allocation 7
  • 9. Search for Excellent Management Qualitative Factors  Run Business for Long-Term  Shareholder Friendly  Conservative Accounting  Judge Leadership on Past Actions, Not Words  Tenure at Firm Quantitative Factors  EPS Growth above 15%  Consistent Earnings Over Time  High ROE  Low debt levels 8
  • 10. Sell Discipline  Negative EPS • We aim to only own stocks with positive EPS  Valuation • If stock becomes popular with investors and valuations become excessive, we will move onto something out of favor  Industry Dynamics change • Purchase based on our favorable macro-view of industry, as business cycle changes we sell  Deteriorating Fundamentals • Decline in profit margin, market share, ROE, or EPS  Swap for similar company with better fundamentals and valuation  Trim any single stock exposure < 10% 9
  • 11. Diversified Portfolio Sector Diversification Tech, 6% Materials, 9% Industrials, 16% Cash, 15% Healthcare, 14% Cons Disc, 4% Cons Stpls, Financials, 7% 10% Energy, 19% Wtd-Avg Market-Cap: $74 billion Median Market-Cap : $48 billion Trailing P/E: 16x Benchmark: Russell 1000 Holdings: 75 Pct Top 10 Holdings: 41% International investing involves additional risks such as currency fluctuation, different accounting methods, and possible political and economic instability. These risks are greater in emerging markets. Companies engaged in the technology industry are subject to fierce competition and their products and services may be subject to rapid obsolescence. 10
  • 12. Capital Preservation  Focus on Management • Proven Leadership  Diversified Holdings • 70-80 holdings across multiple sectors/industries • Global exposure improves opportunity  Avoid Speculative or Trendy stocks • High P/E-G Ratio, High P/E, no EPS, High Beta  Conservative Accounting • Indicative of good management  Cash Allocation  Increase cash exposure during market stress periods  Balanced Portfolio  Sector and position limits  Upside / Downside Capture Ratio  95 Upside / 65 Downside *  Consistent Top Quartile Performance * GSCM Investment Process Has Been Successful For Over 45 Years * see Zephyr Analytics on following pages 11 Investing involves risk and you may incur a profit or a loss. Past performance is not indicative of future results. Visit www.gscapital.net for additional disclosures.
  • 13. Consistent Top Decile Performance 12
  • 14. Consistent Alpha Generation 13 Investing involves risk and you may incur a profit or a loss. Past performance is not indicative of future results. Visit www.gscapital.net for additional disclosures.
  • 15. Multi-Statistic Analysis 14
  • 16. Risk / Return Scattergram 15
  • 17. Performance - Growth of $1 GSCM vs. S&P 500 Index Growth of $1,000,000 Investment - 12/31/96 to 6/30/2010 $3,500,000 S&P 500 $3,000,000 $2.7 million GREENFIELD SEITZ CAPITAL MANAGEMENT $2,500,000 $2,000,000 $1.8 million $1,500,000 $1,000,000 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Past performance is no guarantee of future results. GSCM returns are shown net-of-fees. The S&P 500 is an unmanaged index of U.S. Equities and is shown with dividends re-invested. Please review performance disclosures for additional information. The index cannot be invested in directly. Source: Standard & Poor's 16
  • 18. Composite Data Greenfield Seitz Capital Management Core Composite Returns (accounts over $1 million) Net-of-Fees Year GSCM S&P 500 Number of Dispersion Total Composite Total Firm Assets Composite Total Portfolios % Assets End of End of Period Percentage Total Return Return Period (millions) (millions) of Firm Assets % 1997 17.10% 33.36% 22 6.14 $43.80 $138.69 31.6% 1998 8.94% 28.58% 22 7.66 $42.99 $165.11 26.0% 1999 15.15% 21.04% 24 6.61 $50.65 $179.31 28.2% 2000 14.81% -9.11% 32 5.10 $63.92 $194.67 32.8% 2001 3.68% -11.88% 36 4.53 $70.85 $201.94 35.1% 2002 -14.32% -22.10% 37 4.25 $64.62 $172.01 37.6% 2003 28.77% 28.68% 38 6.04 $76.22 $200.36 38.0% 2004 14.79% 10.88% 45 3.59 $100.21 $231.78 43.2% 2005 16.62% 4.90% 55 4.77 $123.77 $226.25 54.7% 2006 18.85% 15.79% 61 2.94 $150.21 $267.49 56.2% 2007 7.22% 5.50% 63 2.74 $149.20 $273.20 54.6% 2008 -34.43% -37.00% 60 3.75 $97.13 $186.79 52.0% 2009 29.17% 26.46% 55 6.15 $103.07 $197.42 52.2% 3/31/2010 3.13% 5.39% 53 NA $104.45 $203.34 51.4% Cumulative Return 187.46% 98.80% Annualized Rate Return: GSCM S&P 500 Since Inception (12/31/96) 9.77% 5.94% 10 Years 6.62% -0.95% 5 Years 4.71% 0.41% 3 Years -3.16% -5.63% Worst 3-yr Period -9.19% -37.61% Greenfield Seitz Capital M anagement, LLC has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®). Past performance is no guarantee of future results. Annualized returns are as of 12/31/2009. See important disclosures and information on page 5. 17
  • 19. GIPS Verification 18
  • 20. GIPS Disclosures Performance Disclosure: Firm Information: Greenfield Seitz Capital Management ("GSCM") is a registered investment advisor based in Dallas, Texas. GSCM specializes in managing separate investment accounts for high net-worth individuals, with a focus on equities. GSCM is a structured as a Limited Liability Corporation. procedures relating to the management of investment portfolios for high net-worth clients. GSCM utilizes Raymond James Financial, Inc. as its broker/dealer and custodian of assets. Composite Characteristics: The Greenfield Seitz Capital Management Core Composite is comprised of accounts whose primary objective is growth of principle by investing primarily in stocks of U.S. and international companies. Before investing with GSCM, all clients agree to the investment style so all accounts are employing GSCM's investment strategy. The composite contains all disretionary accounts that exceed the minimum asset level. The GSCM Core Composite is the only composite for GSCM and contains no carve-outs. A complete list and description of all firm composites is available upon request (GSCM Core Composite is the only composite for Greenfield Seitz Capital Management). The minimum portfolio size for the GSCM Core Composite is $1,000,000. Accounts may include up to 20% fixed income investments. As a whole, fixed income securities represent less than 5% of total composite assets. The start date for the GSCM Core Composite was January 1, 1997 and the composite was created in October 2004. The composite benchmark is the S&P 500 Index, which represents two- thirds of U.S. equity market value. New accounts are added to the composite at the beginning of the first full calendar month that they meet the composite definition. Closed account data is included in the composite as mandated by the standards in order to eliminate a survivorship bias. Accounts are removed on a monthly basis from the composite when assets fall below 30% of the minimum. Dispersion is only shown on annual periods. Calculation Methodology: Valuations and returns are computed and stated in U.S. dollars, and individual portfolios are revalued monthly. Pricing information is supplied by ISS. The firm uses the trade date monthly returns and links these returns geometrically to produce an accurate time-weighted rate of return. Prior to January 2002, some accounts may have employed the use of settlement date accounting to calculate performance results. Time- weighted total returns include both capital appreciation and reinvested dividends. The GSCM Composite performance is the total return including cash and cash equivalents, of an assset-weighted composite of all discretionary portfolios managed by Stuart Greenfield and Yancey Seitz. Composite returns are asset-weighted. Net of fees returns are calculated net of management fees, transaction costs, and custodian fees. To calculate gross of fees returns, please review our fees and add applicable fees back into returns accordingly. Returns are calculated gross of all withholding taxes on foreign dividends. The dispersion measure is the asset-weighted standard deviation of accounts in the composite for the entire year. On 2/28/06, the composite changed software to Advent Axys. After the change in software programs, composite returns are now calculated using modified dietz and cash-basis dividends. Key Manager Change: In February 2002, Stuart Greenfield assumed co-responsibilty for stock selection and investment management from Eric Greenfield. Yancey Seitz has shared investment management responsibility during all periods of the Composite. Net-of-fee performance: Net of fee performance shown reflects the deduction of actual fees. To calculate gross of fees returns, please review our fees and add applicable fees back into returns accordingly. Actual fees are expected to be lower than the maximum scheduled rate of 1%. All charts and tables are shown Net of Fees. Benchmark: The S&P 500 is an unmanaged index of the shares of large U.S. companies. It includes reinvested dividends and is presented gross of fees. Statistical Definitions: Tracking error/Standard Devation is the square root of the variance. Beta is measure of a portfolio’s volatility relative to the market. R2 is the relative predictive power of a model. Alpha is the extra return above what CAPM determines for the amount of risk taken, risk adjusted return. Excess Return is returns in excess of the risk-free rate. Sharpe Ratio measure risk-adjusted performance using standard devation. Alpha measures performance on a risk-adjusted basis. Sortino ratio differentiates between good and bad volatility. Treynor measures returns earned in excess of that which could have been earned on a riskless investment per each unit of market risk. Custodian Transfer: On 4/1/05, GSCM changed asset custodians. There were no disruptions in peformance and no trading activity during transfer. Fee Schedule: 1.00% on assets under management Other Disclosures: Greenfield Seitz Capital Management has received a firm-wide GIPS® Verification for the period January 1, 1997 - September 30, 2009 from Beacon Verification Services+B33. Past performance does not guarantee future results. This performance report should not be construed as a recommendation to purchase or sell any particular securities held in composite accounts. Market conditions can vary widely over time and can result in a loss of portfolio value. To obtain performance data current to most recent month end, please contact us. You should consider our investment objectives, risks, and fees carefully before you invest. Additional information regarding policies for calculating and reporting returns is available upon request. 19

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