At Sasco Capital, we differentiate our portfolio construction process and help produce high active share portfolios through several key factors.
Our strategy holds a maximum of 35 stocks. Portfolio weightings range between 3% - 6%, and are determined by each stock’s relative risk/reward opportunity and typical trading volume.
To fully vet and challenge conventional thinking, all research and investment decision-making is done on a team basis among Sasco Capital’s portfolio managers and research analysts.
Our risk controls include strong attention to “what could go wrong” for a company. We factor the worst-case scenario into our modeling to consider the potential downside of each holding. We also manage risk through position size limits, analyzing trading volume, monitoring sector and industry exposures, and balancing our portfolios between economically sensitive and defensive stocks.
We place a high degree of emphasis on getting to know leadership teams, and determining whether they share our same vision for transformative change at the company. As such, we meet with management teams frequently, and our investment policy dictates stocks cannot be included in a portfolio unless we’ve had a personal meeting with the company’s management.