At TSW we define ourselves as a traditional value manager who seeks to identify stocks that trade at a discount to intrinsic value, with identifiable catalysts that are likely to close the valuation gap over a 2–3-year time frame, on average. We follow a consistent and repeatable fundamentally oriented process that has been time tested across a variety of market cycles.

In recent weeks, The Wall Street Journal and The Financial Times published articles addressing the wide valuation and performance disparity between U.S. stocks and their foreign counterparts. Although they were published within days of each other, the articles reached opposing conclusions.

While we are not forecasting a decline in mega-cap stocks, the recent outperformance of these names has led us to capitalize on the more attractive valuations found in the lower market cap deciles within our large-cap universe.