“The Four Cs is a common sense approach to equity research that leverages more than 25 years of investing experience.”
– Daren Heitman, CFA, Chief Investment Officer
Turnaround Opportunities We only establish positions in companies when we anticipate significant, positive fundamental change within three years. More specifically, we expect the company’s earnings to be materially and sustainably higher than the current level. Typical drivers of positive fundamental change are a cyclical upturn in an industry, a new product cycle or a company restructuring (often with new leadership).
The stock of the company under consideration must be significantly undervalued relative to our estimate of “fair”, or intrinsic, value. A typical new position will possess appreciation potential of 50-100% at the time of purchase. We expect our price targets to be realized within three years.
We require the companies we purchase to have stable or growing shares of predictable and essential markets. We expect each of our companies to be larger, more valuable entities ten years from purchase. If it is unclear whether or not the company meets that criteria, we consider the investment speculative and outside our discipline.
The companies we purchase have access to capital that comfortably exceeds their capital requirements, usually by a wide margin. Many of our current holdings have substantial cash and no or insignificant debt.
All investments contain risks, and investors should consider the risks associated with investing in our investment products. Value investing involves the risk that the investment in companies whose securities are believed to be undervalued, relative to their underlying profitability, will not appreciate in value as anticipated. Stocks of small companies may be more volatile than, and not as readily marketable as, those of larger companies. Investments made in small capitalization companies are subject to a higher degree of market risk because they tend to be more volatile and less liquid when compared to larger, more established companies. The material included on this website is for informational purposes only, and should not be viewed as a current or past recommendation or a solicitation of an offer to buy or sell any securities or investment product or to adopt any investment strategy.
All information in this website, including with respect to investment objectives and themes, is subject to change without notice or notification of such changes made. The material on this website is not investment, legal, tax, or accounting advice. This website includes forward looking statements and statements of opinion. No representations are made that any of such statements will prove to be accurate, and there is a substantial likelihood that some or all of the forward looking statements will prove highly inaccurate. No endorsement or recommendation is made as to any other entity or issuer, or any security issued thereby, that is referenced in this website, and any information regarding any such entity, issuer or security should be obtained from such entity or issuer directly. References on this website to “Azarias” or “Azarias Capital” or “ACM” are references to Azarias Capital Management.