POTENTIAL OF UNDERVALUED STOCKS
Investors often focus on a few high growth sectors, allowing strong opportunities in other industries to go unnoticed. NFJ's Mid-Cap Value managed account portfolio may be a beneficial way to invest in these undervalued stocks.
EXPERIENCED SPECIALISTS
NFJ Investment Group has a strong track record and consists of a team of managers dedicated to a pure, deep value approach to equity investing. Each of these professionals participate in the investment process, serving as portfolio manager and securities analyst. This team approach means broader resources are committed to portfolio construction.
RISK-AVERSE PHILOSOPHY
NFJ adheres to a strict value philosophy, seeking undervalued, fundamentally sound companies. What sets the firm apart from other value-oriented managers is its emphasis on risk control. To temper the risks associated with equity investing, NFJ maintains broad industry diversification and requires that each stock in its Mid-Cap Value portfolios pay a dividend-a characteristic they believe is an important sign of financial stability.
DISCIPLINED INVESTMENT PROCESS
NFJ's investment process enables it to identify stocks offering attractive valuations and superior long-term growth potential. At the same time, the process seeks to control total portfolio risk.
- Screen for positive fundamentals-Apply a screen for positive fundamental characteristics to a universe of approximately 800 stocks.
- Conduct in-depth research and analysis-Research each of the remaining 150-200 possible investments, looking for companies with low price-to-earnings multiple, a high dividend yield, positive prospective earnings and quality operations.
- Restrict industry concentrations—Promote portfolio diversification by limiting exposure to any one industry to 10% of portfolio assets.
- Construct portfolio-Select approximately 40 of the most attractive securities identified, diversified across industries. Each holding must pay a dividend.
- Regularly monitor for buy and sell candidates-Continually repeat the research process to identify new buy and sell candidates. Sell a stock when an alternative stock with equally strong fundamentals demonstrates a substantially lower price-to-earnings ratio, and/or a substantially higher dividend yield.
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