Home / About Us / Investment Philosophy

Investment Philosophy

Absolute Value® is a highly disciplined, proprietary investment approach developed by River Road. The firm believes it incorporates proven and enduring principles of value equity investing, with an avoidance of the pitfalls associated with the Deep Value and Relative Value investment styles.

The objective of River Road’s Absolute Value® is to generate attractive, sustainable, low volatility returns over the long term, with an emphasis on minimizing downside portfolio risk.

The Absolute Value® investment philosophy is distinguished by four principal tenets:

  • A Focus on Excellent Companies Trading at Compelling Prices
    Seeking well-managed, financially strong companies that generate predictable and sustainable cash flows and trade at attractive discounts, rather than challenged businesses trading at deep discounts or overvalued businesses that are only cheap relative to their higher-priced peers
  • Bottom-up Portfolio Construction
    Emphasizing bottom-up portfolio construction based on River Road’s specific Absolute Value® investment criteria
  • A Focus on Less Efficient Areas of the Equity Market
    Seeking less efficient areas of the market, including smaller cap companies, companies whose shares are temporarily out of favor, and companies that are not yet promoted by Wall Street analysts
  • Risk Aversion
    Employing a balanced approach to diversification and a structured sell discipline that seeks to reduce portfolio volatility and the risk of permanent loss of capital