THOMPSON WOOD PAGE & CO
Investment Management
… Results Driven
THOMPSON WOOD PAGE & CO
Investment Management
Thompson Wood Page & Co. (“ TWP ”)
TWP is an independent investment management company that was formed to produce
above average returns for investors
Over the years, investment returns for many investors have been average at best.
Portfolio managers have been content to “hug the market" and as a result, returns net of
all commissions have lagged the major indices.\
As well, many investors sabotage their potential returns through impulsive behavior.
TWP addresses this with an experienced management group and a single-minded
investment philosophy ;
Companies with growing profitability will inevitably produce above average returns.
Page 2
THOMPSON WOOD PAGE & CO
Investment Management
Our goal is to deliver superior returns for investors
TWP seeks only high quality, compelling opportunities with companies that have
strong balance sheets with proven sustainable earnings.
We produce above average returns by;
1. Staying focused on North American equity investments where we have significant
expertise, solid information and abundant opportunities.
2. Remaining diligent to the TWP process of disciplined independent research
3. Utilizing our investment and business experience to make sound stock decisions
Our investment knowledge and disciplined approach to translating a company’s
profitability into future stock value, results in superior returns for our clients.
Page 3
THOMPSON WOOD PAGE & CO
Investment Management
Seasoned investment & business professionals
Darcy Thompson CHIEF FINANCIAL OFFICER
Darcy is a Chartered Accountant with 18 years experience identifying investment opportunities,
carrying out due diligence and acquiring 100% interests in selected companies. The rigor with which
he performed his private equity investing resulted in annual returns for investors in excess of 50%.
This skill contributes to the TWP process a level of discipline in making decisions on public
securities that adds significantly to the effectiveness of the partnership’s investment decisions.
John Wood PRESIDENT & CEO
John is a licensed investment manager with 28 years of experience in retail investment management.
He has built and sold several investment companies, including the highly successful 20/20 Financial.
His understanding of the special needs of high net worth investors and foundations, where positive
absolute returns with reasonable risk are a necessity, brings clarity of purpose to the partnership.
Chris Page CHIEF INVESTMENT OFFICER
Chris is a licensed investment manager with 31 years of experience in institutional investment
management. He brings deep knowledge of investment portfolio structuring and quantitative analysis
to the partnership. The disciplined processes he has implemented ensures the effective execution of
all the TWP portfolio investment and monitoring disciplines.
Page 4
THOMPSON WOOD PAGE & CO
Investment Management
Our investment philosophy
Companies with growing profitability will inevitably produce above average returns
TWP invests money with three guiding principles:
1. Market information is largely noise generated by emotional response, whether
fear or greed. To be successful, an investment process must be disciplined and
systematic, and eliminate emotional decision – making
1. The constant application of a disciplined investment process will add
significant value to our investors over time.
2. Portfolio risk can be effectively managed through diversification and
uncompromising security selection.
Understanding the value of the security is important, but our focus centers on
profitability.
Page 5
THOMPSON WOOD PAGE & CO
Investment Management
TWP buys profitability in the earnings cycle
Growth
Stocks
Negative
Earnings
Surprise
Revised
Earnings
Models
Positive
Estimate
Revisions
Torpedoes
Stock Earnings
Expectation Cycle
RISING
STOCK
PRICES
FALLING
STOCK
PRICES
Positive
Surprise
Models
“Dogs”
Positive
Earnings
Surprise
Page 6
Negative
Estimate
Revisions
Neglected
Contrarian
Value Stocks
Falling Profitability
Rising Profitability
Escalating
Earnings
Momentum
THOMPSON WOOD PAGE & CO
Investment Management
Our investment process is rigorous
We begin by screening our database of over 3500 stocks to uncover companies with
strong balance sheets and earnings prospects.
To understand the nature of our investment we conduct fundamental analysis into;
business and operations, historical record, management, culture, sustainability, and
growth.
GOAL:
Uncover Low Valuation Stocks with strong balance sheets and earnings potential
VALUATION
• price/earnings ratio
• price/cash flow
• dividend growth
• payout ratios
• debt to equity
• debt to cash flow
Page 7
GROWTH & EXPECTATIONS
MOMENTUM
• long term eps growth
• return on equity
• return on total sales
• earnings variability
• earnings revision
• earnings growth
• cash flow growth
• sales growth
This disciplined process allows rational decisions and avoids an emotional response to
media headlines and 24 hour broadcasts.
THOMPSON WOOD PAGE & CO
Investment Management
Our strong sell discipline is based on facts
A full review of our investment is required if;
•
the price drops 15% below cost (adjusted for market loss).
•
the stock falls below the fourth decile in our quantitative ranks.
•
an event occurs which damages the fundamental earnings prospect of the
firm not yet captured by the quantitative analysis (e.g. exit of senior
management, takeover or merger announcement, earnings restatement).
•
the position reaches our maximum portfolio weighting; or
the stock is considered fully valued.
In most cases the review results in a sale or reduction of the investment position.
Page 8