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What is a Roth Conversion?
Investor Education Series

Written by Wright Design on . Posted in Investor Education, Retirement Resource, Videos, Videos & Podcasts.

What is a Roth Conversion?
Investor Education Series

In this short educational video Shaun Fagant, Shareholder Relations, clearly defines a Roth IRA Conversion.

If you would like more information about a Roth IRA Conversion, please watch our other video, “Roth Conversions” or contact us at 800.932.3271.

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The Quest for Quality Small-Cap Stocks

Written by Wright Design on . Posted in Featured News & Insights, Podcasts, Videos & Podcasts.

THE QUEST FOR QUALITY
SMALL-CAP STOCKS

FAM Small Cap Fund Portfolio Managers Andrew Boord and Kevin Gioia chat with Senior Vice President Anne Putnam about Fenimore’s relentless quest for quality small-cap stocks. This pursuit began in 1974 and continues today.

Podcast Highlights Include:
  • Fenimore’s proprietary, in-depth, quality and margin-of-safety screens.
  • Our select, investable universe.
  • Interesting examples of the types of holdings we seek.
  • Fenimore’s actively managed approach to constructing a concentrated portfolio of small-cap equities.
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Letter From Cobleskill - Fall 2021

Letter from Cobleskill – Autumn

Written by Wright Design on . Posted in Featured News & Insights, Investment Insights, Uncategorized.

Letter From Cobleskill

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    Dear Fellow Shareholder,

    Since the pandemics onset, we have taken two steps forward and one step back on several occasions. This is another one of those times. Corporate earnings for 2021’s first two quarters exceeded expectations and stock prices followed upward. During the third quarter, however, we saw the economy, earnings, and stock market slow down. It happened suddenly, but it is nothing to be alarmed about from our long-term investment perspective.

    A visit to your local grocery store provides a telling picture of what is going on — some shelves are sparsely stocked and more customers are wearing masks.

  • Letter From Cobleskill - Fall 2021

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Earlier this year, with COVID-19 cases on the decline and federal stimulus checks in hand, consumers rushed back into the marketplace — buying homes and cars, taking vacations, and attending all sorts of events. This was great for business. Sales were up, corporate profits jumped, and stock prices rose along with them. Until companies just could not keep up.

The reason is when the economy shut down, so did production lines. Then, when consumer demand exploded, manufacturers could not ramp up fast enough or find the employees they needed. Demand is simply outpacing supply. For example, automakers cannot obtain the semiconductors they need to build cars. Homeowners looking to upgrade appliances often cannot find what they need. As a result, people are suddenly spending less.

At the same time, businesses dealing with staffing shortages are reducing hours, further dampening sales. And now the upswing in COVID-19 cases is sending more people back into the safety of their homes and impacting restaurant seatings, air travel, and other elements of the mobile economy. Combined, these economic disruptions have forced some companies to downgrade their earnings estimates and this has slowed stock market growth.

What the fall has in store for us is impossible to predict — and certainly we are concerned about the resurging health impacts of the virus — but in our view the long-term outlook remains bright. Demand for consumer products is still high and the supply chain kinks should get straightened out. Quality businesses typically adapt, continue to grow, and should be bigger and more profitable five years from now than they are today.

We believe this bodes well for the FAM Funds. Our research team seeks quality companies with solid financial footings that we think are ideally positioned to weather any storm and deliver strong results over time. We focus not on the random, day-to-day, short-term turbulence in the economy or market, but on the businesses behind the stocks.

Have there been some unanticipated changes in recent weeks? Sure. But they do not alter our long-term vision. We believe we will take another two steps forward … And the shelves will once again be completely stocked.

Announcing a transition

Fenimore Founder and Executive Chairman Tom Putnam built the framework for a long-term succession plan many years ago to ensure continuity of experience and investment philosophy for years to come. I am pleased to announce the latest step in this plan.

Longtime Fenimore Investment Research Analyst Marc Roberts has been named as a Portfolio Manager of the FAM Value Fund. Marc served successfully in the same role for the FAM Small Cap fund from 2012 to 2016 before relocating to Chicago. He returned to us last year and quickly re-established himself as a key member of our research team. Marc joins me and Drew Wilson in managing the fund.

At the same time, Tom has announced that he will transition away from being a portfolio manager on our funds at the end of 2021 to concentrate fully on his Executive Chairman role. He will continue to be a mentor and an active participant in our research process and strategic direction. The rest of our fund management teams, including those of us who have led these teams for several years, will remain in place. Paul Hogan and Will Preston manage the FAM Dividend Focus Fund and Andrew Boord and Kevin Gioia the FAM Small Cap Fund.

We look forward to continuing Tom’s well-established tradition of collaborative, team management of the FAM Funds and to working diligently every day as we seek to grow your wealth over time.

Lets connect

We value the personal connections we have with our shareholders. You can reach us with any questions at 800-932-3271, through the contact us section of our website, or via info@fenimoreasset.com. Our team also welcomes you to meet with us in either our Albany or Cobleskill office or via Zoom.

We hope to hear from you soon. Thank you for your continued confidence in us.

Sincerely,
John D. Fox, CFA
CHIEF EXECUTIVE OFFICER

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Roth Conversions
Investor Education Series

Written by Wright Design on . Posted in Investor Education, Retirement Resource, Videos, Videos & Podcasts.

Roth ConversionsInvestor Education Series

In this educational video on Roth IRA Conversions, Shaun Fagant, Shareholder Relations, breaks down this strategy that distributes pre-tax dollars (e.g., Traditional IRA, 401(k), 403(b)) into a Roth IRA for the potential for tax-free growth.

Here are some of the topics covered:

  • Basics of a Roth IRA
  • Introduction to a Roth Conversion
  • Advantages and Drawbacks to a Conversion
  • Frequently Asked Questions
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Meeting with Management: Getting Informed and Building Relationships

Written by Rachel Crisafulli on . Posted in Insights, Investment Insights, Uncategorized.

Meeting with Management: Getting Informed and Building Relationships

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    By: William Preston, CFA®
    Portfolio Manager – FAM Dividend Focus Fund

    Ever since Tom Putnam established Fenimore in 1974, he has maintained the practice of getting out from behind the desk and meeting in-person with management teams, a key tenet of Fenimore’s research process.

    Why do we do it? There are a few factors that support Fenimore’s longstanding belief that face-to-face meetings are a best practice including learning the business better, getting a bigger picture view and building relationships.

    Today, our entire research team is responsible for conducting in-person meetings annually with our portfolio companies with the purpose of achieving the following:

  • Andrew Boord, Portfolio Manager - Fenimore Small Cap Strategy

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  1. Understanding the business better. Many companies communicate their investment thesis through scripted conferences and regulatory filings. However, our in-person meetings give us a much better feel for how the business is managed, how employees are treated and other intangibles, like a great culture, that truly make the business exceptional. These meetings also help increase our conviction to hold onto an investment when the markets become volatile or the stock begins to look expensive, a practice that has served us well throughout our history.

  2. Learning out of the office. While truer in the early days when there was no internet, getting out of the office often grants broader insights about the economy and market environment. Our research team interacts with businesses and management teams in a variety of settings, including at company HQs, store locations, warehouses, distribution centers, manufacturing facilities, industry trade shows and investment conferences, which help provide diverse perspectives.

  3. Building relationships over the long-term. In a world where it is becoming harder for active managers to differentiate themselves, by connecting in-person every year management teams often get an appreciation for Fenimore’s shared long-term investment horizon. This distinguishes us from many short-term investors and traders that are worried about quarterly earnings numbers as opposed to long-term value creation.

Fenimore’s trips to AHR Expo, an annual HVAC (heating, ventilation, an air conditioning) industry trade show, provide a great example of the in-person value we seek to create. Over the years, we have made a number of investments in the HVAC industry and this conference provides an efficient way for us to talk with all of our portfolio companies in this industry, as well as their competitors, suppliers, and customers.

At the last expo, we gained a better understanding of how powerful the tailwind of sustainability through reduced energy consumption will be for the industry.  We also learned that several companies believed consolidation will continue, particularly as foreign companies try to buy their way into the US market to bypass the tremendous barriers to entry.

While the pandemic has temporarily changed the way we interact with management teams, the industry has done a great job adapting to a virtual world, which has enabled us to continue to have valuable face-to-face engagements with existing and potential investments. Most important, you can be assured that the Fenimore team is eager and planning to get back out on the road and resume in-person meetings as soon as possible.

It is this direct connection, and industry understanding that Fenimore has embraced for nearly 5 decades – a tradition we expect to remain for generations to come.

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