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Philosophy - Missouri Valley Partners believes that stocks purchased
at the most reasonable price relative to future earnings, cash flow
and dividends provide the best opportunity for future appreciation
with the least amount of risk. MVP believes internally generated
research is the best source of unbiased industry and company fundamentals.
Missouri Valley Partners investment process is driven by internal
research generated by its industry specialized analysts. The
initial universe from which analysts make stock selections consists
of large cap stocks $2 billion and above. The analysts closely follow
approximately 350+/- of the most attractive and marketable companies
to construct earnings models. Each analyst has direct contact with
the companies and also seeks information from their customers, suppliers
and competitors.
Using a bottom-up stock selection process, MVP's large cap value
style ranks each stock on four valuation criteria: 1) the stock's
projected total return over a one year period; 2) the stock's projected
total return over a three year period; 3) relative price-to-cash
flow; and 4) relative price-to-book value. Stocks are ranked by
decile (1-10) and stocks that fall in the upper 4 deciles are considered
buy candidates. Stocks ranking in the lower 4 deciles are considered sale candidates. Sale consideration could arise from a negative change in the analyst's outlook for the company, the price objective being met, or a negative earnings surprise. Based on MVP's internal ranking process, analysts
recommend buy and sell ideas to the firm's Equity Selection Committee.
Once a decision is made, portfolio managers implement these buys
and sells into all fully discretionary portfolios. This value process
will typically result in a predominance of stocks with below average
P/E ratios and above-average dividend yields, while still maintaining
reasonable earnings growth.
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