We are long-term investors, not traders. We consider ourselves “business pickers” as opposed to “stock pickers.” In the equity portion of client portfolios, we think of our holdings as a “best ideas” portfolio. We believe that shows the conviction we have as “business pickers.” Our team strives to align client portfolios with management teams that have shown the ability to create long-term shareholder wealth. We take immense pride in our research and knowing what we own in client portfolios which we believe is another factor that differentiates Duncker Streett & Co. from our toughest competition.

Our investment philosophy is disciplined, proven, and repeatable. We believe our cash flow-based investment philosophy differentiates Duncker Streett from our toughest competition.. Why cash flow? We have historically focused on cash flow as we believe it is the best measure of corporate performance and the best measure of the true economics of a business.

Our research focuses on the key drivers of value creation. We believe cash flow drives stock prices rather than earnings. So, our team concentrates on the drivers of cash flow. Increasing cash flow is driven by increasing sales, increasing operating margins, and balance sheet productivity. In our view, the market pays for the change in cash flow rather than the level of cash flow. Therefore, we search for companies that are improving their cash flow rate of return. In addition, we pay close attention to the valuation paid for our equity holdings. We concentrate on quality companies with solid balance sheets led by management teams that have shown the ability to create long-term shareholder wealth and are undervalued relative to our price targets.

Furthermore, we believe that capital allocation is a key driver of value creation. Thus, we take a deep look into how management teams have allocated capital in the past, their future priorities for capital allocation, and whether their previous allocation decisions have created shareholder wealth. There are four ways to allocate capital: reinvest back into the business, growth through M&A, share repurchase, or issuing a dividend.

Positions are sold in client portfolios due to valuation, a significant adverse change in the outlook for the business, better investment idea, a management mistake, or if a company is acquired. We do our best to hold turnover to a minimum and to be as tax efficient as possible.

Equity holdings are selected from a universe of largecap and midcap domestic companies. Given our extensive experience in smallcap equity, we may add smallcap exposure when it fits with a client’s risk profile.

Portfolios consist of 30 to 50 equity holdings diversified across market sectors and industries that have historically shown the ability to create long-term shareholder wealth.