Heartland Mid Cap Value Strategy

  • Overview
  • Materials
  • Portfolio Management Team
  • Performance
  • Commentary
  • Portfolio Composition
  • Risk Analysis

Overview

Investment Focus

Seeks long-term appreciation by investing in mid-cap, dividend paying companies

Distinguishing Characteristics

  • Invests primarily in mid-cap securities within the market cap range defined by the Russell Midcap® Index
  • Designed for investors who seek a portfolio of medium-sized, dividend paying companies
  • Benchmarked to the Russell Midcap® Value Index
  • Typically holds 30-60 stocks
  • Inception date: 1996

Investment Process

All stocks are evaluated based on our proprietary, consistent, and time-tested 10 Principles of Value Investing™. These criteria are central to Heartland’s value investing philosophy and provide a framework for evaluating securities.

The Investment Team applies a bottom-up research approach, combining traditional fundamental analysis and meetings with more than 1,000 company management teams in a typical year. The 10 Principles™ are designed to help the Team assess a company's valuation, but also focus on metrics associated with financial soundness, management team strength, and future outlook.

Learn more about our process

Investment Minimum & Standard Fee Schedule

Minimum: $1 million

Account Size Annual Rate (%)
First $5 million 1.00
Next $10 million 0.85
Above $15 million Negotiable


A Look at Our Mid Cap Value Strategy

Portfolio Management Team

Heartland Advisors Mid Cap Value Strategy Portfolio Management Team

32 years of industry experience
22 years of experience at Heartland

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Will Nasgovitz

Nasgovitz is CEO and Portfolio Manager of the Select Value and Mid Cap Value Funds and their corresponding separately managed account strategies. He also is CEO of Heartland Funds. He has 17 years of industry experience, 14 at Heartland.

Colin McWey

McWey, CFA, is Vice President and Portfolio Manager of the Select Value and Mid Cap Value Funds and their corresponding separately managed account strategies. He has 15 years of industry experience, 8 at Heartland.

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Investing Perspectives

PM Perspective
5/18
Heartland Advisors value investing portfolio manager Colin McWey

Cash Flow: An Equalizing Force in Analysis

Cash flow helps us evaluate opportunities on an apples to apples basis regardless of industry or debt.

Heartland in the News
5/22/18
Heartland Advisors Value Investing Portfolio Manager Colin McWey, CFA

Will a Surge in Oil Prices Fuel Opportunities in Energy?

A potential upswing in the Energy sector as oil prices continue to rise. Portfolio Manager Colin McWey, CFA, weighs in.

Heartland in the News
5/10/18
Heartland Advisors Value Investing Portfolio Managers Will Nasgovitz and Colin McWey

Opportunities Arriving by Sea and Sky?

Portfolio Managers Will Nasgovitz and Colin McWey, CFA share their stock picks for the long days of summer.

PM Perspective
4/18
Heartland Advisors Value Investing Portfolio Manager Colin McWey

Why Catalysts and Context Matter

The difference between an unloved laggard and an attractive investment opportunity often begins with perception. Here is a look at internal catalysts and their importance in changing investors’ views and company results.

Water & Wells
2/6/18
Heartland Advisors Value Investing Portfolio Manager Colin McWey

Normal is Dead, Long Live Normal!

The return of volatility could provide opportunities for active investors going forward.

Heartland in the News
1/25/18
Heartland Advisors Value Investing CEO and Portfolio Manager Will Nasgovitz

Heartland CEO: Record Market Highs Haven’t Dried the River of Value

Will Nasgovitz was interviewed about the current environment for value investors.

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Water & Wells
1/23/18

Value—it’s the Real Thing

Why the value versus growth debate is about more than the investment flavor of the day.

PM Perspective
11/17

Digging Deeper to Avoid Yield Traps

Today’s income hungry world underscores the need to dig into free cash flow and payout ratios to avoid yield traps.

Heartland in the News
9/20/17

Taking the Inflation Bull by the Horns

When inflation heats up, will Industrials follow? Portfolio Manager Colin McWey, CFA, shares his perspective with MarketWatch.

Water & Wells
8/29/17

Oops! Did They Do it Again?

The meteoric rise of a handful of stocks may have investors forgetting lessons learned from the tech bubble of the late 1990s.

Video
7/17 - 4:03

Here's What's Missing in the Energy Debate

Why the current slump in Energy requires a fresh perspective.

Performance*

Average Annual Total Returns
  • Quarter-End
  • Annual
3/31/2018

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Since Inception (%)10-Year (%)5-Year (%)3-Year (%)1-Year (%)YTD (%)QTD (%)
Mid Cap Value Composite (Net of Advisory Fees)11.6610.8611.977.754.87-0.96-0.96
Russell Midcap® Value10.749.8111.117.236.50-2.50-2.50

 

2017 (%) 2016 (%)

2015 (%)

2014 (%)

2013 (%)

2012 (%)

2011 (%)

2010 (%)

2009 (%)

2008 (%)

2007 (%)

2006 (%)

2005 (%)

Mid Cap Value Composite (Net of Advisory Fees)

8.55 28.25

-6.64

10.78

39.46

10.49

-7.72

25.29

35.14

-22.19

5.13

24.10

18.41

Russell Midcap® Value

13.34 20.00

-4.78

14.75

33.46

18.51

-1.38

24.75

34.21

-38.44

-1.42

20.22

12.65

 

*Source: FactSet Research Systems Inc., Russell Investment Group, and Heartland Advisors, Inc. Performance data is preliminary. YTD and QTD returns are not annualized. The Strategy's inception date is 9/30/1996.

Commentary

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3/31/18
Heartland Advisors Mid Cap Value Strategy Portfolio Manager Commentary

Heartland Mid Cap Value Strategy 1Q18 Portfolio Manager Commentary

New trade tariffs, a sixth rate-hike from the Federal Reserve, and budding inflation left investors searching for opportunities that have the potential to thrive in a less accommodative world.

Portfolio Composition

Characteristics
3/31/2018

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Weighted Average Market Cap ($)Median Market Cap ($)Trailing 1-Year Turnover (%)
Mid Cap Value Composite13.5 billion10.4 billion47.1
Russell Midcap® Value13.9 billion7.3 billion-

Source: FactSet Research Systems Inc., Russell Investment Group, and Heartland Advisors, Inc.

Valuation Analysis
Equity securities only, weighted median unless otherwise noted

3/31/2018

Source: FactSet Research Systems Inc., Russell Investment Group, and Heartland Advisors
*Weighted average
**Weighted average, and Dun & Bradstreet is excluded from total debt/capital because its open market stock repurchases have made the company’s total equity negative, resulting in an excessively high debt ratio that is not reflective of the company's investment grade credit rating based on Heartland Advisors’ beliefs.

Heartland Advisors Mid Cap Value Strategy Valuation Analysis Charts 1Heartland Advisors Mid Cap Value Strategy Valuation Analysis Charts 2

Sector Allocation

3/31/2018

Source: FactSet Research Systems Inc., and Russell Investment Group
Composite statistics shown as percentage of equity investments

Heartland Advisors Mid Cap Value Strategy Sector Charts 1Heartland Advisors Mid Cap Value Strategy Sector Charts 2

Top 10 Holdings in a Representative Account
3/31/2018

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TickerHolding% of AccountIndustry
EXCExelon Corporation4.51Electric Utilities
FEFirst Energy Corp.3.80Electric Utilities
STISunTrust Banks, Inc.3.62Banks
BPOPPopular, Inc.3.57Banks
CACA, Inc.3.28Software
AVTAvnet, Inc.3.11Electronic Equipment Instruments & Components
DGXQuest Diagnostics Incorporated3.10Health Care Providers & Services
BENFranklin Resources, Inc.2.89Capital Markets
CNACNA Financial Corporation2.83Insurance
NOVNational Oilwell Varco, Inc.2.65Energy Equipment & Services
% of Total Net Assets33.36

Security-Level Attribution & Contribution

3/31/2018

These materials are for financial professional use only. You will be prompted to log in. Free account registration is available.

5-Year Risk Analysis

3/31/2018

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Alpha*Standard Deviation (%)*BetaInfo RatioSharpe RatioUpside Capture (%)*Downside Capture (%)*R-
Squared (%)
Active Share
Mid Cap Value Composite (Net of Advisory Fees)0.4711.451.040.191.02110.05110.4885.3993.38
Russell Midcap® Value0.0010.181.000.001.06100.00100.00100.000.00

*Annualized
Source: FactSet Research Systems Inc., Russell Investment Group
Alpha, beta, and information ratio are versus the Russell MidCap® Value Index.

The above performance, portfolio composition, and risk analysis data is preliminary.

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©2018 Heartland Advisors | 789 N. Water Street, Suite 500, Milwaukee, WI 53202 | Business Office: 414-347-7777 | Financial Professionals: 888-505-5180 | Individual Investors: 800-432-7856

Past performance does not guarantee future results. Performance represents past performance, and current returns may differ.

Heartland Advisors, Inc. (the "Firm") claims compliance with the Global Investment Performance Standards (GIPS®). The Firm is a wholly owned subsidiary of Heartland Holdings, Inc., and is registered with the Securities and Exchange Commission. For a complete list and description of Heartland Advisors composites and/or a presentation that adheres to the GIPS® standards, contact the Institutional Sales Team at Heartland Advisors.

The U.S. dollar is the currency used to express performance.

The inception date for the Mid-Cap Value Strategy is 9/30/1996.

The Mid Cap Value Strategy invests in mid–sized companies on a value basis. Mid-sized securities generally are more volatile and less liquid than those of larger companies.

Value investments are subject to the risk that their intrinsic value may not be recognized by the broad market.

Portfolio holdings are subject to change without notice. Current and future portfolio holdings are subject to risk.

Sector and industry classifications as determined by Heartland Advisors may reference data from sources such as FactSet Research Systems Inc.

Representative account chosen based on composite membership, not on performance-based criteria. Other accounts within the strategy may have different holdings.

Representative account holdings are preliminary, may not be reconciled, and may be updated when reconciled.

Certain security valuations and forward estimates are based on Heartland Advisors' calculations. Any forecasts may not prove to be true.

Economic predictions are based on estimates and are subject to change.

Heartland’s investing glossary provides definitions for several terms used on this page.

CFA® is a registered trademark owned by the CFA Institute.

Separately managed accounts and related investment advisory services are provided by Heartland Advisors, Inc., a federally registered investment advisor. ALPS Distributors, Inc., is not affiliated with Heartland Advisors, Inc.

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