Common sense value investing
For more than 25 years, Heartland has utilized the same time-tested investment process, The Ten Principles of Value Investing™, to identify companies we believe limit downside risk while offering upside opportunity. Our contrarian value approach targets stocks we believe meet the following criteria:
- Low absolute and relative valuations
- Strong balance sheets
- Experienced and motivated management teams
- Improving earnings expectations
- Priced at a discount to their intrinsic worth
Together, Heartland's 10 Principles of Value Investing,™ give us confidence we are buying attractively priced stocks that potentially protect to the downside and participate in the upside.
Timeless investing process
These principles are just as relevant today as they were when they were developed by Founder, President and Portfolio Manager Bill Nasgovitz in the mid 1970's. During the bear market of 1973-74, Bill reread Benjamin Graham's book, The Intelligent Investor. The wisdom of this famous value investor struck a cord. When discussing business valuations versus stock market valuations, Ben Graham explains,
"A stock does not become a sound investment merely because it can be bought at close to its asset value. The investor should demand, in addition, a satisfactory ratio of earnings to price, a sufficiently strong financial position, and the prospect that its earnings will at least be maintained over the years."
At Heartland, our 10 Principles were built around this belief. Not only is it important that a stock trades at a low price to earnings, cash flow and book value basis, we also want to be confident in how financially sound a company is and how well it will perform in the future.
We believe the effectiveness of our value investing philosophy is revealed in the Funds' proven long-term record. The Heartland Value Fund has outperformed its' benchmark for over a quarter of a century.
Building wealth takes time
Although we may not be able to control a stock's price in the short term, we believe great companies are recognizable and can build wealth for patient investors. We understand that many people want to see a quick response to their investment dollars. However, this may be unrealistic. We ask you to take a long-term perspective so that we may have the best opportunity to create wealth for you.