SUNCOAST EQUITY MANAGEMENT

Transcription

1 U.S. Equity Large Q OBJECTIVE (SEM) is an independent investment management firm that invests in U.S. listed equities. Our objective is to produce rates of total return in excess of the S&P 500 and most other money managers, over the long-term, while only incurring a relatively moderate amount of risk. Our discipline is a bottom-up, fundamentally-driven approach that blends value and growth parameters in selecting a relatively concentrated portfolio of 15 to 25 stocks. Our ownership of an individual stock is typically for 5 or more years. Our investment approach is focused on long-term performance results and generally considered tax-advantaged. PHILOSOPHY SEM is an investment manager employing our interpretation of the principles and teachings of two of the most successful investment practitioners over the last century, Benjamin Graham and Warren Buffett. There are three principles at the foundation of our philosophy: Invest in businesses, not stocks: Our view of investing as part owners in a business rather than just buying and selling shares of stock, gives us a sustainable and substantial advantage. We focus on individual companies, not the stock market. Margin of Safety concept: We look for every opportunity to reduce the chance of a permanent loss of capital. The greater the Margin of Safety, the lower the chance of loss. Stock market approach and attitude: Our business analysis assesses the intrinsic value of a company and takes advantage of the stock market pricing when it is favorable. We do not try to forecast stock market movements. Note: Reducing Risk -This is a key characteristic of outstanding investment results. Risk is not the volatility of stock prices to the long-term value investor. Risk is paying more than the businesses is worth. Total Risk/Reward ROR Std Dev Alpha Beta R2 Up Down p SEM Growth Equity l S&P n Russell Growth of $1,000,000 - Gross of Fees n Suncoast Equity Growth Equity $6,793,331 n Standard & Poor s 500 $3,982,989 n Russell 1000 $4,131,959 Historical Performance, Gross of Fees Year SEM S&P 500 Relative Results 2018 through 3/31 2.9% -0.8% 3.7% % 21.8% 10.3% % 11.9% -13.9% % 1.4% 3.4% % 13.7% -2.6% % 32.4% 5.1% % 16.0% 4.4% % 2.1% 3.3% % 15.1% -7.1% % 26.5% -0.3% % -37.0% 7.6% % 5.5% 5.7% % 15.8% -6.4% % 4.9% -4.3% % 11.0% 2.9% % 28.6% -7.1% % -22.1% 12.2% % -11.9% 13.4% % -9.1% 14.8% % 21.0% 4.6% % 28.6% -1.0% (Overall Gain) 582.2% 298.3% 283.9% Average Annual Return 10.0% 7.1% 2.9% 2018 Annualized Returns Through 3/31/18 (Gross of Fees) 1 Year 3 Year 5 Year (20 1/4 Years) SEM 24.5% 11.0% 14.1% 10.0% S&P % 10.8% 13.3% 7.1%, LLC claims compliance with the Global Investment Performance Standards (GIPS). To receive a complete composite list or presentation that adheres to the GIPS standards please contact us using the information below.

2 U.S. Equity Large Q DISCIPLINED INVESTMENT SYSTEM (SEM-DIS) Our strategy is to select individual companies that score highly by Suncoast Equity Management s Disciplined Investment System (SEM-DIS). The five-step process involves: 1. Financial Performance and Strength - Identify companies that a.) earn above average return on capital, b.) generate excess free cash flow and, c.) employ moderate to low debt. 2. Business Track Record - Emphasis on companies which have a consistent operating history. 3. Business Outlook & Opportunities - Select companies with favorable long-term prospects. We want to own companies that have a sustainable franchise or business advantage. We seek growth businesses. 4. Management - Ownership and ital Allocation Skills - Partnering with management that thinks and behaves like an owner. We require that management be candid with shareholders and demonstrate keen skills in the allocation of capital. Analysis of management, their strategies approach and attitudes, is vital. 5. Valuation - Assess the business value and invest with a margin of safety. The SEM-DIS measures the intrinsic value of a business and its internal rate of return to that of other stocks and fixed income. PORTFOLIO MANAGERS Donald R. Jowdy - President & Chief Investment Officer Prior to founding in 1998, Mr. Jowdy was a Portfolio Manager with Polen ital Management. The firm consistently performed in the top 10% of its peer group for three, five and ten year periods, as measured by several industry consultants including Effron/ PSN and Nelson s Investment Manager Database. During his tenure, Mr. Jowdy played a key role in the company s growth from $20 million in assets to approximately $250 million. Mr. Jowdy then served in an advisory capacity to Polen ital Management during its growth to over $1 billion in client assets, through September Previously, Mr. Jowdy was an equity analyst with 13D Research, Inc., advising institutional clients through an independent investment research organization. He provided an in-depth analysis of domestic as well as global investment opportunities in areas such as Latin America, Southeast Asia and the People's Republic of China. Mr. Jowdy was also a Senior Associate with Coopers & Lybrand. He is a graduate of Indiana University with a B.S. in Accounting. Amy A. Lord, CFA - Senior V.P. and Co-Portfolio Manager Amy Lord was previously Vice President/Portfolio Manager with Intrepid ital where she was sole manager of the company s Large Equity and Investment Grade Fixed Income portfolios. Prior to joining Intrepid in 2001, Ms. Lord was Managing Director, Senior Portfolio Manager of The Investment Counsel Company. During her nine years with the firm, her responsibilities included equity and fixed income portfolio management and analysis; marketing and client servicing; and overseeing GIPS performance compliance. Ms. Lord earned a Bachelor of Science in Advertising, with a minor in Mathematics, from the University of Florida. She is a CFA charter holder and past President of the CFA Society of Orlando, as well as a member of the CFA Institute Sector Weightings- GICS Sectors Consumer Disc. Consumer Stap. Top Ten Holdings March 31, 2018 Company Ticker % Weight Visa Inc. V 8.7 Accenture LTD Booking Holdings Inc. ACN 8.0 BKNG 7.2 Facebook FB 6.0 Alphabet Class A & C CBRE Group Class A GOOG GOOGL Energy Financials Healthcare Industrials Information Tech. Materials Telecom Utilities SEM R 1000 S&P 500 Portfolio Construction 5.8 CBRE 5.8 Honeywell HON 5.8 Cognizant Tech Paypal Holdings Inc Berkshire Hathaway B CTSH 5.1 PYPL 5.1 BRK b 5.1 Average Holding Period: 3-5 years Portfolio Weightings: 4-6% Positions Trims at ~10-12% Portfolio Turnover: 15-30% Number of Holdings: Sector Constraints: Typically does not exceed 2x any S & P 500 sector.

3 U.S. Equity Large Q OBJECTIVE (SEM) is an independent investment management firm that invests in U.S. listed equities. Our objective is to produce rates of total return in excess of the S&P 500 and most other money managers, over the long-term, while only incurring a relatively moderate amount of risk. Our discipline is a bottom-up, fundamentally-driven approach that blends value and growth parameters in selecting a relatively concentrated portfolio of 15 to 25 stocks. Our ownership of an individual stock is typically for 5 or more years. Our investment approach is focused on long-term performance results and generally considered tax-advantaged. PHILOSOPHY SEM is an investment manager employing our interpretation of the principles and teachings of two of the most successful investment practitioners over the last century, Benjamin Graham and Warren Buffett. There are three principles at the foundation of our philosophy: Invest in businesses, not stocks: Our view of investing as part owners in a business rather than just buying and selling shares of stock, gives us a sustainable and substantial advantage. We focus on individual companies, not the stock market. Margin of Safety concept: We look for every opportunity to reduce the chance of a permanent loss of capital. The greater the Margin of Safety, the lower the chance of loss. Stock market approach and attitude: Our business analysis assesses the intrinsic value of a company and takes advantage of the stock market pricing when it is favorable. We do not try to forecast stock market movements. Note: Reducing Risk -This is a key characteristic of outstanding investment results. Risk is not the volatility of stock prices to the long-term value investor. Risk is paying more than the businesses is worth. Total Risk/Reward ROR Std Dev Alpha Beta R2 Up Down p SEM Growth Equity l S&P n Russell Growth of $1,000,000 - Gross of Fees n Suncoast Equity Growth Equity $6,793,331 n Standard & Poor s 500 $3,982,989 n Russell 1000 $4,131,959 Historical Performance, Net of Fees Year SEM S&P 500 Relative Results 2018 through 3/31 2.6% -0.8% 3.4% % 21.8% 10.3% % 11.9% -13.9% % 1.4% 3.4% % 13.7% -2.6% % 32.4% 5.1% % 16.0% 4.4% % 2.1% 3.3% % 15.1% -7.1% % 26.5% -0.3% % -37.0% 7.6% % 5.5% 5.7% % 15.8% -6.4% % 4.9% -4.3% % 11.0% 2.9% % 28.6% -7.1% % -22.1% 12.2% % -11.9% 13.4% % -9.1% 14.8% % 21.0% 4.6% % 28.6% -1.0% (Overall Gain) 450.8% 298.3% 152.5% Average Annual Return 8.8% 7.1% 1.7% 2018 Annualized Returns Through 3/31/18 (Net of Fees) 1 Year 3 Year 5 Year (20 1/4 Years) SEM 23.4% 9.9% 13.1% 8.8% S&P % 10.8% 13.3% 7.1%, LLC claims compliance with the Global Investment Performance Standards (GIPS). To receive a complete composite list or presentation that adheres to the GIPS standards please contact us using the information below.

4 U.S. Equity Large Q DISCIPLINED INVESTMENT SYSTEM (SEM-DIS) Our strategy is to select individual companies that score highly by Suncoast Equity Management s Disciplined Investment System (SEM-DIS). The five-step process involves: 1. Financial Performance and Strength - Identify companies that a.) earn above average return on capital, b.) generate excess free cash flow and, c.) employ moderate to low debt. 2. Business Track Record - Emphasis on companies which have a consistent operating history. 3. Business Outlook & Opportunities - Select companies with favorable long-term prospects. We want to own companies that have a sustainable franchise or business advantage. We seek growth businesses. 4. Management - Ownership and ital Allocation Skills - Partnering with management that thinks and behaves like an owner. We require that management be candid with shareholders and demonstrate keen skills in the allocation of capital. Analysis of management, their strategies approach and attitudes, is vital. 5. Valuation - Assess the business value and invest with a margin of safety. The SEM-DIS measures the intrinsic value of a business and its internal rate of return to that of other stocks and fixed income. PORTFOLIO MANAGERS Donald R. Jowdy - President & Chief Investment Officer Prior to founding in 1998, Mr. Jowdy was a Portfolio Manager with Polen ital Management. The firm consistently performed in the top 10% of its peer group for three, five and ten year periods, as measured by several industry consultants including Effron/ PSN and Nelson s Investment Manager Database. During his tenure, Mr. Jowdy played a key role in the company s growth from $20 million in assets to approximately $250 million. Mr. Jowdy then served in an advisory capacity to Polen ital Management during its growth to over $1 billion in client assets, through September Previously, Mr. Jowdy was an equity analyst with 13D Research, Inc., advising institutional clients through an independent investment research organization. He provided an in-depth analysis of domestic as well as global investment opportunities in areas such as Latin America, Southeast Asia and the People's Republic of China. Mr. Jowdy was also a Senior Associate with Coopers & Lybrand. He is a graduate of Indiana University with a B.S. in Accounting. Amy A. Lord, CFA - Senior V.P. and Co-Portfolio Manager Amy Lord was previously Vice President/Portfolio Manager with Intrepid ital where she was sole manager of the company s Large Equity and Investment Grade Fixed Income portfolios. Prior to joining Intrepid in 2001, Ms. Lord was Managing Director, Senior Portfolio Manager of The Investment Counsel Company. During her nine years with the firm, her responsibilities included equity and fixed income portfolio management and analysis; marketing and client servicing; and overseeing GIPS performance compliance. Ms. Lord earned a Bachelor of Science in Advertising, with a minor in Mathematics, from the University of Florida. She is a CFA charter holder and past President of the CFA Society of Orlando, as well as a member of the CFA Institute Sector Weightings- GICS Sectors Consumer Disc. Consumer Stap. Top Ten Holdings March 31, 2018 Company Ticker % Weight Visa Inc. V 8.7 Accenture LTD Booking Holdings Inc. ACN 8.0 BKNG 7.2 Facebook FB 6.0 Alphabet Class A & C CBRE Group Class A GOOG GOOGL Energy Financials Healthcare Industrials Information Tech. Materials Telecom Utilities SEM R 1000 S&P 500 Portfolio Construction 5.8 CBRE 5.8 Honeywell HON 5.8 Cognizant Tech Paypal Holdings Inc Berkshire Hathaway B CTSH 5.1 PYPL 5.1 BRK b 5.1 Average Holding Period: 3-5 years Portfolio Weightings: 4-6% Positions Trims at ~10-12% Portfolio Turnover: 15-30% Number of Holdings: Sector Constraints: Typically does not exceed 2x any S & P 500 sector.

5 Annual Performance Results Net of Fees Performance Disclosure SEM Composite Assets Year SEM Composite S&P 500 TR Composite Dispersion (%) 3 Yr Annual Std Dev SEM 3 Yr Annual Std Dev S&P TR Total Assets at End of Period (USD millions) Percentage of Firm Assets Number of Portfolios Wrap Assets as a % of Total Composite Assets Total Firm Assets (USD Mlns) UMA Assets (USD Mlns) Supplemental information % % % % % % % % % % % % % % % % % % % %

6 Performance Disclosure 1., LLC is an independent investment management firm established in is primarily an equity investment manager that invests in U.S.-based securities. As of 9/08. SEM also invests in high-grade fixed income. The Composite includes all discretionary, fee-paying portfolios managed within this strategy. The equity composite was created on 12/31/ The composite is an equity only composite employing the principles of Benjamin Graham & Warren Buffett. The discipline is a bottomup fundamental approach and blends value and growth parameters. The portfolio consists of between stocks. 3. Bundled fees include management consultant fees, custodial, trading, and advisor fees. Performance is calculated gross of all foreign withholding taxes. Additional information regarding policies for valuing portfolios, calculating performance, and preparing compliant presentations as well as a complete list and description of composites is available upon request. 4. For the non-bundle fee accounts, the performance results presented are net of actual investment advisory fee and net of all transaction costs. For the bundle fee accounts, the performance results presented are net of actual investment advisory fee and net of all transaction costs and expenses. Investment advisory fees are described in Part II of, LLC s Form ADV. The management fee schedule is as follows: 1.00% fee on assets managed. The firm does not assess performance based fees. 5. The index used for comparison is the Standard and Poor s 500 Total Return Index, an unmanaged index with no expenses, which covers 500 industrial, utility, transportation, and financial companies in the U.S. markets. It is a capitalization-weighted index calculated on a total return basis with dividends reinvested. 6. The composite dispersion represents a measurement of the consistency of the composite s performance results with respect to the returns of the individual accounts within the composite over an annual period. The annual dispersion is measured by the asset-weighted standard deviation of the composite. Only portfolios that have been managed for the full period are included in the composite dispersion calculation. In accordance with the GIPS standards, dispersion data is not provided for years in which the composite is comprised of five or fewer accounts and of periods of less than one year. 7. Valuations and returns are computed and stated in U.S. Dollars. The firm does not use leverage or derivatives to implement the intended strategies. 8. Beginning in June 2002, accounts that experience cash flows in excess of 10% of the account s market value are temporarily removed from the composite. These accounts are added back to the composite when they are considered fully invested. The minimum account value for inclusion in the composite is $100,000. Additional information regarding the treatment of significant cash flows is available upon request. 9. The 3-year annualized Ex-Post Standard Deviation is calculated using 36 consecutive monthly returns to the end calculation period. 10. adheres to the GIPS valuation hierarchy Principles. 11. Past performance is not indicative of future results. Returns include the reinvestment of income. 12. Compliance Statement: claims compliance with the Global Investment Performance Standards (GIPS ) and has prepared and presented this report in compliance with the GIPS standards. has been independently verified for the periods 12/31/97-6/30/15. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. The SEM Equity composite has been examined for the period of 12/31/97 to 6/30/15. The verification and performance examination reports are available upon request. For any additional information, please contact the Chief Compliance Officer at (813)