Investment Management
Our investment research is based on an in-depth process we’ve developed and worked with for 30 years. We want to own companies where we know and understand their businesses.
Chad Clauser, CFA®
Partner and Portfolio Manager
Distinct Philosophy
Standing Apart from the Crowd
Lawson Kroker is inherently contrarian, willing to stand apart from the crowd. As a team, we define winning as success for you; not by what Wall Street managers and analysts say.
This means not getting caught up in the drama of media headlines, but in using long-term investment strategies that help build and protect your wealth for the future. We seek to avoid the whims of the market—following the crowd usually isn’t the best plan for achieving financial success.
Investing as Art
We believe in the fine art of investing. Our investment team carefully crafts a unique picture of what you want success to look like. Like fine art, each portfolio should reflect the creative and personalized aspects of a masterpiece. The result is a patient, consistent approach that builds confidence for you in an ongoing and long-term investment partnership.
How We Invest
Disciplined
Decisions are based on disciplined research.
Our research is based on an in-depth process we’ve developed and worked with for 30 years. We want to own companies where we know and understand their businesses.
Focused
We invest in a small, concentrated list of favored securities.
The ability to focus on a select group of businesses sets us apart—and allows us to focus on a select group of clients, too. We typically monitor about 100 businesses, and may own about 25-30.
Patient
We invest in businesses and/or bonds that may perform well over time.
Our process is patient and focused on the long-term, with a minimum three to five-year outlook and holding period.
What We Look for in Owning Securities
Our portfolio managers look to own businesses that we understand. We also look for businesses with an honest, ethical, energetic management team and a strong track record of increasing value. Other critical factors include:
- Competitive advantage
- History of delivering consistent earnings growth of 10% or more for the past five years
- History of increasing earnings in seven of the past 10 years
- Good balance sheet with little or no debt
- Unique or patented product, or monopoly or duopoly market
- High barrier to entry and a long runway of potential success
- High margin of safety: can be purchased at a discount to our estimate of value
What We Look for When Selling Securities
We will typically sell a company’s stock when our research tells us that its valuation has grown so high that the expected return falls below alternatives and is well above long-term historical average multiples. Other factors we look for:
- Has the economics of the business deteriorated?
- Is the security not performing as we originally believed it would?
- Has the margin of safety (the difference between the intrinsic value of a stock and its market price) declined?
How We Build Your Portfolio
At the center of our research is a repeatable pattern that guides investment decisions. We typically monitor about 100 businesses and may own about 25-30. All of the securities in our individualized client portfolios must pass a rigorous screening process:
The Lawson Kroeker Process
Identify
Seek out distinct companies that we believe possess competitive advantages, are underfollowed, undervalued, and underappreciated.
Analyze
Examine each individual company in-depth and subject them to rigorous evaluation.
Confirm
Collaborative effort of the investment team to accept/reject investment ideas after all concerns have been addressed.
Implement
Select the companies we believe to appear to offer the best potential return for the risk being taken.