Ariel's value and deep value strategies follow a disciplined, patient investing philosophy by searching for undervalued or underfollowed companies. We take advantage of the market's short-term thinking to optimize long-term results for our clients. We further believe ethical business practices make good investment sense and seek companies in alignment with our social quality criteria, similar to how we search for a margin of safety. More specifically:
- Our value and deep value strategies do not invest in corporations whose primary source of revenue is derived from the production or sale of tobacco products or the manufacture of firearms.
The responsibility factor is an important piece in assessing a company and its corporate culture. We review regulatory filings, research from MSCI Inc. and ISS, and directly engage with management. As long-term investors, management teams are viewed as business partners, and we pursue partnerships with shared values.
- Commitment to social/civic responsibility: community/civic involvement builds vibrant, sustainable communities and ties customers to brands and businesses.
- Proactive diversity practices: companies that cultivate diversity are more likely to attract the best talent and broaden their markets in profitable new ways.
- Ethical decision-making: firms that take strong moral responsibility develop long-term, competitively advantaged business models.
- Environmental policies: companies with sound environmental practices are less likely to face government regulation, costly litigation and fines.
We believe a dedication to social awareness and corporate governance drives better companies. Because strong financial results do not have to come at the expense of social integrity, we integrated it most formally into our small, small/mid and mid cap value research efforts whereby three analysts assess an investment’s full potential: a primary analyst, a devil’s advocate, and a dedicated impact research professional who engages directly with management.