Investing in the Future

Written by Spiral Design on March 24, 2023. Posted in All News, Fenimore in the Community.

Investing in the Future

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Fenimore associates participated in several different career and investment education events for students recently as part of our ongoing commitment to investing in future generations. Highlights include:

Middleburgh Central School District Career Day

Fenimore was proud to be among the 40+ businesses and organizations participating in Middleburgh Central School District Career Day.

Students in grades 7^th through 12^th had the opportunity to select areas of interest from different career groupings. Within each group, presenters spent time with the students discussing their organization, role within the organization, career background and required skills. During each of these sessions, Joe LeRoy, an Investor Relations professional at Fenimore, spoke to students about the tradeoffs between spending, borrowing, and investing, the importance of time in the market and the critical skills and background required to serve investors.

Liberty Partnerships Program Career Fair at SUNY Cobleskill

Liza Baran, Director of Shareholder Services & Operations, welcomed the opportunity to attend the Liberty Partnerships Program Career Fair at SUNY Cobleskill. The fair provided an opportunity for SUNY Cobleskill students to explore a wide variety of careers. Liza was able to meet with students as they stopped by the Fenimore table to ask questions and learn about the types of careers at Fenimore, educational requirements, and daily business activities.
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Junior Achievement Titan CEO Challenge

Junior Achievement (JA) brings business leadership skills and inspiration to nearly 150 Capital Region high schools. During the recent JA Titan CEO Challenge, Christian Snyder, J.D., CFA®, President of Fenimore, was pleased to be among the local CEO/President mentors.

The goal of the JA Titan CEO Challenge is “…a focus on financial analysis and insights into the workforce, JA Titan brings business economics to life with decision-making across all functions of the students’ simulated companies.” Each class was paired with a mentor that shared their personal experiences related to business management, tying together first-hand knowledge and the popular simulation challenge in which students compete as business CEOs.

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Driven by results and a commitment to serve the community and clients, Fenimore is a trusted investment partner

Written by Spiral Design on March 15, 2023. Posted in All News, Company Hightlights.

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Q4 Earnings Takeaway: Strategic Capital Allocation is Key

Written by Spiral Design on March 10, 2023. Posted in Featured News & Insights, Investment Insights.

Q4 Earnings Takeaway: Strategic Capital Allocation is Key

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In an environment where significant free cash flow generation, strong balance sheets, and superior management teams are crucial to company performance (and even survival), we believe our focus on high-quality enterprises with solid financials is more important than ever.

Strategic capital allocation is one of the most important activities management teams do based on our experience of nearly 50 years. We strive to invest in companies that, after paying business expenses, generate more cash than they need and in turn seek to increase shareholder value.

With excess free cash, leadership has five capital allocation choices.
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1. Invest in the Business

This includes building new plants, adding more stores, increasing inventory, and research and development.

2. Impact the Balance Sheet

Put cash on the balance sheet.
Pay down debt.

3. Conduct Mergers and Acquisitions

Companies can acquire businesses to accelerate their growth.
When they acquire another firm, this tends to increase sales, profits, and their stock price.

4. Pay a Dividend

We seek companies that pay a dividend and consistently increase that dividend over time. We believe dividend growth is important because only businesses that are growing their cash flow are able to consistently grow their dividends. We favor investing in businesses that are growing their dividends quickly because it means the underlying operation is expanding.

5. Buy Back Stock

A stock buyback is when a corporation purchases its own shares in the stock market and it demonstrates the management team’s confidence in their business.
A buyback reduces the number of shares outstanding and this increases earnings per share and, frequently, the stock’s value.
All buybacks are not alike. Just as we seek to purchase shares at a discount to a company’s value, we prefer businesses that repurchase their shares at reasonable valuations as well.

Across Fenimore’s three mutual funds (FAM Funds), 100% of our holdings are employing one or more of these strategic tools. This bolsters our confidence in their leaders and business.

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Unsung Heroes

Written by Spiral Design on February 6, 2023. Posted in All News, Community Spotlight, Featured News & Insights.

Unsung Heroes

The Richmondville Volunteer Emergency Squad (RVES) provides emergency medical services to more than 2,600 residents in a rural Upstate New York county as well as to surrounding communities. While this rescue team is accustomed to saving others in danger, they recently had their own urgent situation.

RVES’s 2005 ambulance was in constant disrepair — a nerve-racking circumstance for first responders whose equipment can make the difference between life and death. As an all-volunteer squad that does not receive regular municipal funding, it was their turn to ask the community for help.

Fenimore’s associates were honored to support RVES’s capital campaign and thrilled when they stopped by to celebrate their new, state-of-the-art ambulance and give us a tour!

Thank you RVES for your selfless acts of service for those in need!

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Christian Snyder & The Albany Business Review Leader Board

Written by Spiral Design on December 19, 2022. Posted in All News, Company Hightlights.

Christian Snyder & The Albany Business Review Leader Board

Christian Snyder, J.D., CFA®, President, was named in the Albany Business Review’s Leader Board series as one of the ‘54 Capital Region senior executives you should know’ on December 11th. This series features ‘well-known executives making career moves and those new to the region.’*

Christian Snyder, J.D., CFA®, joined Fenimore as President in October 2022. He succeeds Debra Pollard who is retiring from Fenimore at the end of 2022 after a tenure of more than 30 years, the last six as President. He previously held the position of Chief Operating Officer of the Wealth Strategies Group at Goldman Sachs Ayco Personal Financial Management.
Congratulations Christian!

*The Albany Business Review Leader Board is a quarterly series that introduces readers to the newest top executives.

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All Aboard!

Written by Spiral Design on December 2, 2022. Posted in Investing Basics, Investor Education.

All Aboard!

Tom Putnam, Fenimore Asset Management’s Founder & Executive Chairman, has a saying, “You have to be aboard the train before it leaves the station.” His analogy pertains to investing, especially investors who believe that they can time the market.

Market timers hope they can catch the market at its highest or lowest point in an attempt to maximize returns and often let their emotions get in the way of rational decision making. They become fearful and sell when they should buy. The typical result is that they miss market upswings and their gains are much less than what they would have been if they had just stayed the course. Trying to time the market does not work over the long term.

Time in the Market — Not Market Timing

Nobel Prize laureate William Sharpe found that stock market timers must be right most of the time just to equal the returns that buy-and-hold, long-term investors achieve. While long-term investors are steady, market timers sweat over when is the best time to get in or out of the market. There is an overwhelming amount of research that shows that long-term investing — even through a stock market downturn — yields better results over the years than trying to time a decline, remove capital, and return when “things are better.”

What if the market drops?

Some investors are concerned that the train is going to sputter. The fact is, at some juncture, it will — it’s an inevitable part of the journey. When the market drops, Fenimore seeks opportunities to invest in what we believe are quality, well-managed businesses at a discount to our estimate of their economic worth. We try to use downturns to strengthen our mutual funds for the long haul.

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Long-term investing or market timing? It’s your decision. But if you’re looking for us, we’ll be on the train.

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Quality Investing: Its Impact During Down Markets

Written by Spiral Design on November 29, 2022. Posted in Featured News & Insights, Investment Insights.

Quality Investing: Its Impact During Down Markets

Investment Insights: Fenimore’s Latest White Paper

William Preston, Portfolio Manager of the FAM Dividend Focus Fund, discusses how Fenimore’s mutual funds have performed in down markets over the decades and analyzes their quality characteristics.

Highlights Include:

Achieving long-term investment goals usually depends on staying invested during down markets and having an established risk management process.
The downside capture ratio of Fenimore’s three equity mutual funds helps quantify the benefits of our risk management approach.
Fenimore Asset Management conducts firsthand research and seeks to invest in select, quality businesses. We believe it is our holdings’ collective quality characteristics that have helped our mutual funds typically outperform during down markets.

Read Here

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An Investment Ride Through 2022…

Written by Spiral Design on November 29, 2022. Posted in All News.

AN INVESTMENT RIDE THROUGH 2022…

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The coronavirus came to America’s shores more than 2.5 years ago, and the economy and financial markets are still feeling the impact. As active, fundamental investors we are focused on what businesses are doing and how they can and will grow for the long term. Here are our thoughts on the current market climate and why we believe it’s more important than ever to remain focused on a long-term strategy.

Inflation, Its Impact and The Fed:

In 2022, the largest impact to our financial markets is a resurgence of inflation to a level not seen in over 40 years.

As we started 2022, stimulus created consumer demand combined with a supply constrained economy which began to push up prices. Then in February, just months into this push, Russia invaded the Ukraine which caused a spike in energy prices worldwide. This combination of events has had a powerful impact on our economy, with consumer prices experiencing a year over year increase of 8%.
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Our country’s central bank, The Federal Reserve, is charged with two jobs: maintaining high employment and low inflation. When leaders at the Federal Reserve see the increase in inflation it’s their job to bring it down. The primary tool they have for doing that is increasing short term interest rates.

The Impact of Rising Interest Rates:

Since interest rates are the key variable in valuing financial assets like stocks, bonds, and real estate, higher interest rates can mean lower asset prices. Of course, this is exactly what investors are experiencing this year. Over the last 12 months US stocks represented by the S&P 500 index have declined over 14%. The primary measure of bond returns is down 13% and publicly traded real estate has declined 20%.

The other impact of higher interest rates is to slow economic activity. The simplest example is housing. The typical home buyer gets a mortgage to buy a home. The monthly payment is based on the amount borrowed and the interest rate. Higher rates mean less buying power, fewer qualified home buyers, and a slowdown in sales. We are seeing exactly this phenomenon: a slowdown in housing related companies. We expect other industries to follow with slower sales.

The Value and Necessity to Staying the Course:

As always and especially in this very dynamic environment, we continue to closely monitor the companies where we choose to invest by:

Talking to management teams on the phone
Face-to-face visits including meeting with management, customers, and suppliers as well as on-site visits to facilities
Reading financial statements continuously for changes

This gives us the confidence we need to execute our long-term strategy:

Investing in quality businesses that meet our rigorous financial standards, demonstrating strong leadership teams that have a proven track record of creating value for investors over time.

It is with this strategy in mind that we continue to monitor the conditions in the short-term environment, while gaining the knowledge and confidence from business analysis and engagement needed to focus on long-term growth.

Our Funds are Beating Benchmarks and Remaining Focused on the Long-Term

So far this year each of our three mutual funds, FAM Value Fund, FAM Dividend Focus Fund and FAM Small Cap Fund, have declined less than their respective benchmarks, so while our funds are down for the year, they are down less. We remain committed to the businesses we have invested in, carefully monitoring them on a day to day basis on behalf of our investors to ensure they continue to demonstrate the long term growth characteristics, strong management, and value creation we believe differentiates our portfolios.

Learn more about our solutions and our market-tested investment approach:

OUR INVESTMENT APPROACH

*FAM Value Fund and FAM Dividend Focus Fund Benchmark = Russell Midcap Index
The Russell Midcap Index is an unmanaged index that measures the performance of a mid-cap segment of the U.S. equity universe. This benchmark is used for comparative purposes only and may not reflect the risk or investment style of the investments reported. Additionally, you cannot invest directly in an index.

FAM Small Cap Fund Benchmark = Russell 2000 Index
The Russell 2000 Index is an unmanaged index that measures the performance of a small-cap segment of the U.S. equity universe. This benchmark is used for comparative purposes only and may not reflect the risk or investment style of the investments reported. Additionally, you cannot invest directly in an index.

https://fenimoreasset.com/solutions/mutual-funds/

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FAM Small Cap Fund: WSJ Category King – Once Again

Written by Spiral Design on November 14, 2022. Posted in All News, Company Hightlights, Featured News & Insights.

FAM Small Cap Fund: WSJ Category King – Once Again

The FAM Small Cap Fund was recognized as a “Category King” in The Wall Street Journal* for the second consecutive month.

“It’s an honor to be recognized again; however, the credit is owed to our team and Fenimore’s market-tested investment approach that has been refined over the past 48 years,” said Kevin Gioia, Portfolio Manager of the FAM Small Cap Fund. “We look forward to continuing to serve our shareholders as we seek to invest in what we believe are quality businesses that can produce strong returns over time.”

FAM SMALL CAP FUND DETAILS

THE QUEST FOR QUALITY SMALL CAP STOCKS

*The FAM Small Cap Fund (Investor Class Shares) was listed in the “Small-Cap Growth” category. “Category Kings in 16 Realms” selection criteria: “Top-performing funds in each category, ranked by year-to-date total returns (changes in net asset values with reinvested distributions) as of Oct. 31; assets are as of Sept. 30. All data are final.” Oct., year-to-date, 1-year, and 5-year performance are shown in the listing. The FAM Small Cap Fund is listed as number three in this year-to-date ranking out of 740 funds.

Securities offered through Fenimore Securities, Inc. Member FINRA/SIPC, and advisory services offered through Fenimore Asset Management, Inc.

Past performance is not indicative of future results. All investing involves risk including the possible loss of principal. Before investing, carefully read the fund’s investment objectives, risks, charges and expenses. FAM Funds’ prospectus or summary prospectus contains this and other important information about FAM Funds and should be read carefully before you invest or send money.

To obtain a prospectus or summary prospectus and performance data that is current to the most recent month-end for each fund as well as other information, please go to fenimoreasset.com or call (800) 932-3271.

The principal risks of investing in the fund are: stock market risk (stocks fluctuate in response to the activities of individual companies and to general stock market and economic conditions), stock selection risk (Fenimore utilizes a value approach to stock selection and there is risk that the stocks selected may not realize their intrinsic value, or their price may go down over time), and small-cap risk (prices of small-cap companies can fluctuate more than the stocks of larger companies and may not correspond to changes in the stock market in general).

Neither this presentation nor any of its contents may be distributed or used for any other purpose without the prior written consent of Fenimore. The description of certain aspects of the market herein is a condensed summary only. This summary does not purport to be complete and no obligation to update or otherwise revise such information is being assumed. These materials are provided for informational purposes only and are not otherwise intended as an offer to sell, or the solicitation of an offer to purchase, any security or other financial instrument. This summary is not advice, a recommendation or an offer to enter into any transaction with Fenimore or any of their affiliated funds. This presentation may contain statements based on the current beliefs and expectations of Fenimore’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Any references herein to any of Fenimore’s past or present investments, portfolio characteristics, or performance, have been provided for illustrative purposes only. It should not be assumed that these investments were or will be profitable or that any future investments will be profitable or will equal the performance of these investments. There can be no guarantee that the investment objectives of Fenimore will be achieved. Any investment entails a risk of loss. Unless otherwise noted, information included herein is presented as of the date indicated on the cover page and may change at any time without notice.

Securities offered through Fenimore Securities, Inc. Member FINRA/SIPC, and advisory services offered through Fenimore Asset Management, Inc.

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William Wise Joins Fenimore

Written by Spiral Design on November 8, 2022. Posted in All News, Company Hightlights.

William Wise Joins Fenimore

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Fenimore Asset Management, an independent, Capital Region-based investment advisory firm and manager of the FAM Funds family of mutual funds, has hired William “Billy” Wise as Director, a role in which he will educate and inform financial professionals regarding Fenimore’s investment products.

“With 16 years of experience working closely with financial advisors across the country, Billy will be a key contributor to Fenimore’s third-party distribution and service team,” said Fenimore Senior Vice President Anne Putnam. “Billy excels at helping advisors identify pathways to their clients’ financial goals. His commitment to building long-term, trusting relationships exemplifies the Fenimore approach to service excellence.”
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Prior to joining Fenimore, Mr. Wise held national leadership positions with Tandem Wealth Advisors of Phoenix, AZ, and Beaumont Capital Management of Needham, MA. He also served as a retirement income specialist with John Hancock Investments. He is a Chartered Retirement Planning Counselor (CRPC^®), an Accredited Investment Fiduciary (AIF^®), and a Certified 401(k) Plan Administrator. Mr. Wise holds a bachelor’s degree in political science from Trinity College in Hartford, CT.

Founded in 1974, Fenimore Asset Management is an independent, nationally recognized investment manager with more than $3.6 billion in assets under management (as of 9/30/2022) through its Cobleskill and Albany offices. Fenimore offers both individually managed portfolios and a family of mutual funds (FAM Funds) that can be used for retirement and other long-term investment planning. The firm’s team focuses on in-depth research, investing in carefully selected quality businesses, and providing its investors with highly personalized investment services.

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Investing in the Future

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Q4 Earnings Takeaway: Strategic Capital Allocation is Key

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Unsung Heroes

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Christian Snyder & The Albany Business Review Leader Board

All Aboard!

Time in the Market — Not Market Timing

What if the market drops?

Quality Investing: Its Impact During Down Markets

AN INVESTMENT RIDE THROUGH 2022…

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FAM Small Cap Fund: WSJ Category King – Once Again

William Wise Joins Fenimore

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