News & Insights

Intrinsic Value — White Paper

In this paper, we seek to position Channing Capital Management’s intrinsic value investment approach in the tradition of Ben Graham, David Dodd, and Warren Buffett. We argue that an investment philosophy of intrinsic value investing offers an opportunity to outperform benchmarks and peers by adapting the still-valid principles of Graham, Dodd, and Buffett in today’s variety of companies. This approach relies on having a long-term perspective more in common with a private investor or corporate board member than that of a short-term, price-focused market trader, and remains a powerful investment style in today’s environment of hundreds of “value” products, benchmarks, and styles.

We also recommend that investors and their advisors consider concentrated, or “best ideas,” portfolios when reviewing investment options. Concentrated portfolios represent high conviction by asset managers in their stock-picking skills and can offer commensurate returns with only modest increases in risk resulting from holding fewer names.

High-conviction strategies also offer greater opportunities than “diversified” portfolios to benefit from increasing merger and acquisition activity and are more in keeping with intrinsic value investment strategies that view candidates as “companies” rather than “stocks.”

Read The White paper