Duncker Streett builds diversified portfolios of stock that are diversified across economic sectors, style (growth and value) and market capitalization. Aggressive growth (such as momentum, early stage, or high P/E stocks) and deep value (such as commodity or turn-arounds), however, are generally avoided.

The process begins with a qualitative assessment of a company that appears to have attractive growth prospects. Factors such as management, business plan, industry position, and product lines are evaluated. Strategic dynamics between the company and its competitors, suppliers, and customers are considered as well as secular and cyclical trends within the industry. Once a buy candidate has been identified, quantitative tests are applied to determine if a security is attractively priced. Traditional fundamental measures of valuation, profitability, and growth are examined. A sophisticated cash flow return on investment (CFROI) and asset growth analysis is undertaken to investigate true corporate performance and assess the fair value of the stock. Companies that are leaders in growing industries with strong revenue growth and a high and rising CFROI are favored.

Securities are often sold when objectives are met, fundamentals deteriorate, a holding becomes disproportionately large, valuation reaches historical highs, or when a more attractive alternative is identified. Although holding periods may vary widely, and our best performing stocks are often held for long periods of time, it is frequently necessary to wait three to four years to realize the full potential of our initial investment thesis. Technical sell indicators may also be used. Capital gain considerations play an important role in the selling process for taxable portfolios. Average annual portfolio turnover is roughly 25%.

 Asset allocation and stock selection are determined by “top down/bottom up” analyses.