PHILOSOPHY

Eagle Capital Management, LLC uses a bottom-up, research-driven approach to find undervalued growth companies that should benefit from long-term secular change. Portfolio investments share two primary characteristics. The first is that, even in times of stress, the underlying income-producing assets are sufficiently resilient to maintain a value floor for the investment. The second is a prospective, developing change that is unrecognized by the market and likely to be very valuable in the out years – a free call option. An additional important requirement is a proven, effective management team to ensure that unforeseen challenges and opportunities are addressed appropriately. Each investment must hold up to Eagle's long-term horizon, rigorous valuation discipline, and intense investment scrutiny.

This approach allows Eagle to minimize risk and to maximize upside potential. The value floor should defend the portfolio when times are bad, while the long-term change should generate extra return as opportunities are realized. Eagle's approach does not win in every quarter and in every kind of market; the firm's goal is to outperform significantly any broad market index over a full market cycle.

The foundation of Eagle's investment approach includes:

  • Buying Undervalued Companies with a Free Call Option: Eagle seeks stocks that are fairly valued based on their current franchise and where there is limited market recognition of their long-term potential for growth.
  • Establishing a Competitive Research Advantage: Eagle adds value through extraordinary original research and the use of a long time horizon for investment advantage.
  • Minimizing Risk: Eagle avoids high expectation stocks where the perceived future opportunity has been discounted. The firm seeks undervalued stocks that will experience long-term secular change. These opportunities are often the point of greatest return and the point of lowest risk.
  • Portfolio Focus: Eagle deploys its best ideas in a portfolio of 25 to 35 stocks.
  • Best Practices: Eagle develops and maintains best practices and discipline in every step of its processes.

  
© 2011, Eagle Capital Management, LLC