Naylor & Company Investments specializes in the management of stock portfolios designed for the purpose of generating performance over the long-term that is better than the S&P 500. Naylor & Company uses a consistent, deep-value investing strategy to create diversified, but focused portfolios that emphasize companies with strong competitive positions, good long-term growth potential and attractive stock prices.
Client portfolios are managed in separate, independent accounts at TD Ameritrade. Naylor & Company’s stock investments are represented by the Naylor & Company Core Composite. Morningstar has awarded the Naylor & Company Core Composite its highest rating of 5 stars.
Since our founding 12 years ago, we have used the investment strategy of the Naylor & Company Core Composite to generate annualized stock investment returns, net of fees, of 16.6%, in comparison to 10.1% for the Russell 3000®, our benchmark, and 9.6% for the S&P 500 (from 4/10/2003 to 6/30/2015). Naylor & Company claims compliance with the Global Investment Performance Standards (“GIPS®”) and has been independently verified for the periods April 10, 2003 to December 31, 2014, by Ashland Partners & Company LLP. Applicable disclosures can be found on the Naylor & Company website at www.naylorinvest.com.
Naylor & Company typically finds investments in industries or sectors in the beginning stages of recovery. There are often many good attributes to the companies in these industries. First, the stock prices can be relatively low because many investors do not have the patience to await the recovery. Second, the strong companies have usually streamlined their operations to manage the downturn. Third, the strong companies face reduced competition in the recovery because the weaker companies failed, resulting in less competition. Consequently, the recovering companies can achieve both higher revenues and higher profit margins in the recovery.
Within a particular industry, we select companies for investment that have growing businesses, strong competitive positions, solid balance sheets, proven records of producing earnings and an ability to produce goods or services that are truly needed by the public. In the past, we have used this process to find good investments in a variety of industries, including airlines, healthcare, online travel agencies, banking, the rental car industry, automobile manufacturing, gaming, website hosting, tow truck manufacturing, retail, cable television, transportation logistics and semiconductor manufacturing. Having the flexibility to invest in many different industries allows us to take advantage of the multiple cycles of downturn and recovery across the U.S. economy. This further allows us to find value in all types of stock markets, including expensive stock markets.
Although Naylor & Company prefers to hold investments for several years, we constantly monitor our companies to make sure that their businesses are developing as expected and that their stock prices are not getting too far ahead of their earnings. If either of these events occur, we seek other investments that meet our objectives.
Patient, long-term investing in deep-value companies is a hallmark of Naylor & Company’s investment strategy. Investors who share a similar philosophy are a good fit as Naylor & Company clients.