Value investing drives everything we do at Harris Associates. Our investment process is a collective effort to identify what we believe are the best opportunities in the market.
We believe purchasing businesses at a discount to intrinsic value minimizes risk while providing substantial profit potential. And by holding a smaller number (generally 20 to 70) of stocks in the portfolios, our managers' best ideas can have a meaningful impact on investment performance.
We focus primarily on free cash flow and company management, rather than low price-to-earnings, low price-to-book ratios or other more commonly used value measures. We also look for hidden assets, such as underappreciated franchise values or potential benefits from restructuring.
We apply strict proprietary quantitative screens to identify companies that meet our initial investment criteria. Rigorous bottom-up research is then conducted by one of our analysts, and if a company still looks promising, the research results are presented to our portfolio managers and other analysts. Finally, a committee of senior investment professionals votes on whether or not to add the company’s stock to the firm's approved list.
As part of a company's approval, analysts set a buy target at a significant discount to our estimate of intrinsic value. A sell target is also set, typically at 90 percent to 100 percent of intrinsic value. Analysts routinely revisit these targets and make updates if there are fundamental changes in the company's business.
Individuals and Families
Customized wealth management services and the Oakmark mutual funds
Consultants, foundations, endowments, pension funds and other institutional investors
Registered advisors, planners, broker-dealers and other financial professionals