What is Deep Value Equity Investing? Less than 1/10th of 1% of all money managers invest in the lowest decile of stocks by price-to-tangible book value.* Our investment strategy targets out-of-favor companies valued in the bottom decile of price-to-tangible book value ratios. Studies have shown, and our long record of outperformance has confirmed, that this universe of stocks substantially outperforms the broader market over extended cycles. A 2015 study that we conducted with Compustat data showed that from 1951-2014, stocks in the lowest price-to-tangible-book-value decile outperformed both the market and other deciles. The Compustat Study Returns by price-to-book ratio decile, 1951-2014 (64 years) S&P 500 11% STOCKS IN THE LOWEST PRICE-TO-TANGIBLE-BOOK DECILE DELIVERED THE HIGHEST RETURNS OVER THE LONG TERM. BACK TO TOP >> * Results of a study conducted by professors Lakonishok, Shleifer and Vishny of the University of Illinois, Harvard and the University of Chicago, respectively, entitled, “What Do Money Managers Do?” and circulated as a working paper by the University of Illinois in February, 1997. © 2021, Donald Smith & Co., Inc. All Rights Reserved | Privacy Policy

ABOUT OUR PEOPLE INVESTMENT STRATEGY INVESTMENT PROCESS CONTACT Our Investment Process At Donald Smith & Company, we employ a disciplined, bottom-up approach to stock picking. Our process begins with a quantitative screening to identify stocks trading in the lowest decile of the market by price-to-tangible-book-value. Within this universe, we conduct intensive fundamental research to identify the stocks with the greatest potential for outperformance. This process involves analyzing the quality of book value and identifying hidden assets and liabilities. We seek to identify companies with significant underappreciated earnings potential over the next 2-4 years. Those that meet our strict valuation criteria are added to our proprietary watch list for further in-depth analysis. From this watch list of approximately 200-300 low price-to-tangible-book-value stocks, we choose the most attractive ones to conduct further fundamental research. We are an employee-controlled investment management firm with an extensive track record of success. We offer separate accounts across six composites: All Cap, Large, Mid, Small, Micro, and Global Value. BACK TO TOP >> © 2021, Donald Smith & Co., Inc. All Rights Reserved | Privacy Policy