US Value Strategy

Inception Date: SEP 01, 2001

Seeks to deliver attractive real returns while avoiding the permanent impairment of capital over time by using a value approach to investing in equity markets.

Strategy at a glance

  1. Not all companies held in this strategy will meet the criteria listed.

  2. The above are not investment guidelines or restrictions and are subject to change without notice.

  3. The information provided is not to be construed as a recommendation or an offer to buy or sell or the solicitation of an offer to buy or sell any fund or security.

Investment Philosophy

The investment strategy looks for opportunities in companies exhibiting financial strength and stability, strong management and fundamental value.
  • We believe that the market episodically fails to recognize, in our view, a company’s intrinsic value; we selectively invest when price presents what we believe to be an appropriate “margin of safety.” 
  • We seek persistent businesses that embody asset scarcity, strong capital structures and corporate resilience. 
  • Our fundamental, bottom-up approach requires a temperament focused on: patience, humility and flexibility. 
 

Strategy Highlights

  • Absolute Return Mindset

    Dedication to mitigate downside risk. 

  • Flexible, Benchmark-Agnostic Approach

    Ability to invest across sector, market cap and asset class without constraints of a benchmark. 

  • Strategic Allocation to Gold and Cash

    Our flexible cash and cash equivalent allocation is a residual of equity selection; we hold gold as a potential hedge against market dislocations. 

Strategy at a glance

  1. Not all companies held in this strategy will meet the criteria listed.

  2. The above are not investment guidelines or restrictions and are subject to change without notice.

  3. The information provided is not to be construed as a recommendation or an offer to buy or sell or the solicitation of an offer to buy or sell any fund or security.

Our Process

The investment team follows a bottom-up, fundamental approach, focusing on companies with businesses which it believes both exhibit sustainable profitability and are trading at significant discounts to their “Intrinsic Values.”

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  1. Risk Disclosures

  2. All investments involve the risk of loss of principal.

  3. Investment in gold and gold-related investments present certain risks and returns on gold related investments have traditionally been more volatile than investments in broader equity or debt markets.

  4. A principal risk of investing in value stocks is that the price of the security may not approach its anticipated value or may decline in value. “Value” investments, as a category, or entire industries or sectors associated with such investments, may lose favor with investors as compared to those that are more “growth” oriented.

  5. Disclosures

  6. These are not investment guidelines or restrictions and will be subject to change. Actual portfolio will differ.

  7. FEF Distributors, LLC (“FEFD”) (SIPC), a limited purpose broker-dealer, distributes certain First Eagle products. FEFD does not provide services to any investor, but rather provides services to its First Eagle affiliates. As such, when FEFD presents a fund, strategy, or other product to a prospective investor, FEFD and its representatives do not determine whether an investment in the fund, strategy or other product is in the best interests of, or is otherwise beneficial or suitable for, the investor. No statement by FEFD should be construed as a recommendation. Investors should exercise their own judgment and/or consult with a financial professional to determine whether it is advisable for the investor to invest in any First Eagle fund, strategy, or product.

  8. Definitions

  9. “Intrinsic value” is based on our judgment of what a prudent and rational business buyer would pay in cash for all of the company in normal markets.

  10. First Eagle defines "margin of safety" as the difference between a company's market price and our estimate of its intrinsic value. An investment made with a margin of safety is no guarantee against loss.

  11. Benchmark Definitions

  12. Indices are unmanaged and do not incur management fees or other operating expenses. One cannot invest directly in an index.

  13. Standard & Poor's 500 Index: Standard & Poor's 500 Index is a widely recognized unmanaged index including a representative sample of 500 leading companies in leading sectors of the U.S. economy and is not available for purchase. Although the Standard & Poor's 500 Index focuses on the large-cap segment of the market, with approximately 80% coverage of U.S. equities, it is also considered a proxy for the total market.

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  • Brooker Kimball Headshot

    Kimball Brooker Jr.

    Co-Head of Global Value Team and Portfolio Manager
    Industry start:  
    1992
    Year joined:  
    2009
  • Matthew Lamphier Headshot

    Matthew Lamphier

    Portfolio Manager and Director of Research
    Industry start:  
    1994
    Year joined:  
    2007
  • Matthew McLennan Headshot

    Matthew McLennan

    Co-Head of Global Value Team and Portfolio Manager
    Industry start:  
    1991
    Year joined:  
    2008
  • Mark Wright Headshot

    Mark Wright

    Portfolio Manager and Senior Research Analyst
    Industry start:  
    1994
    Year joined:  
    2007

Our Process

The investment team follows a bottom-up, fundamental approach, focusing on companies with businesses which it believes both exhibit sustainable profitability and are trading at significant discounts to their “Intrinsic Values.” Additionally, the team has the flexibility to invest in non-equity securities, including cash and cash equivalents, corporate debt, short-term government bonds and gold.
 
Selective Participation

  • 01

    Scarcity

    We look for companies that exhibit scarcity through intangible and tangible assets associated with their businesses that may result in strong demand advantages and/or lasting supply advantages.

    We believe that scarcity of assets is the foundation of durability.

  • 02

    Durability

    Businesses with durability generally have long duration, scarce assets, strong capital structures and management with prudent mindsets. 

    Scarce and durable assets overlaid with a strong capital structure and strong management teams may result in what we view as attractive companies that potentially produce persistent earnings.

  • 03

    Persistence

    Once we have identified a company with demonstrated persistence, we look for the intersection of attractive price and timing to selectively participate.

  • 04

    “Margin of Safety”

    Buy and sell decisions are based on our estimates of a company’s “intrinsic value” and “margin of safety”—the difference between its market value and our estimate.

We seek to avoid companies with high valuations, high levels of leverage, “black box” balance sheets, vulnerable business models, and/or aggressive management behavior.

  1. Risk Disclosures

  2. All investments involve the risk of loss of principal.

  3. Investment in gold and gold-related investments present certain risks and returns on gold related investments have traditionally been more volatile than investments in broader equity or debt markets.

  4. A principal risk of investing in value stocks is that the price of the security may not approach its anticipated value or may decline in value. “Value” investments, as a category, or entire industries or sectors associated with such investments, may lose favor with investors as compared to those that are more “growth” oriented.

  5. Disclosures

  6. These are not investment guidelines or restrictions and will be subject to change. Actual portfolio will differ.

  7. FEF Distributors, LLC (“FEFD”) (SIPC), a limited purpose broker-dealer, distributes certain First Eagle products. FEFD does not provide services to any investor, but rather provides services to its First Eagle affiliates. As such, when FEFD presents a fund, strategy, or other product to a prospective investor, FEFD and its representatives do not determine whether an investment in the fund, strategy or other product is in the best interests of, or is otherwise beneficial or suitable for, the investor. No statement by FEFD should be construed as a recommendation. Investors should exercise their own judgment and/or consult with a financial professional to determine whether it is advisable for the investor to invest in any First Eagle fund, strategy, or product.

  8. Definitions

  9. “Intrinsic value” is based on our judgment of what a prudent and rational business buyer would pay in cash for all of the company in normal markets.

  10. First Eagle defines "margin of safety" as the difference between a company's market price and our estimate of its intrinsic value. An investment made with a margin of safety is no guarantee against loss.

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