At Lyrical Asset Management, we are fundamental value investors. The combination of value investing with quality and analyzability distinguishes the Lyrical investment program. We believe our hallmarks - value, quality, and analyzability - create a resiliency in our portfolios. Our sole aim in crafting our investment program is to maximize long-term investment returns. Lyrical employs a repeatable process to identify undervalued securities. We believe we have engineered our investment program to create the greatest likelihood of success.

We seek to own shares of companies that are trading at substantial discounts to their intrinsic value. Purchasing securities at discounts to intrinsic value should create a margin of safety and allow for uncommon return generation. We believe that the greater the discount, the greater the potential for investment return.

While attractive valuation is the most important thing, it is not the only thing we require in an investment. We will only invest in quality companies. We seek businesses that we believe will generate attractive returns on their invested capital. We seek resilient businesses, those with reasonable debt levels, positive growth, attractive margins, competent management, and the flexibility to react to all phases of the business cycle. Our quality discipline leads us to avoid deeply cyclical companies, basic materials and commodities, and regulated utilities.

We will only invest in companies we can thoroughly analyze and understand. Certain businesses do not lend themselves to fundamental analysis, either because of complexity or opacity. Examples include banks, pharmaceuticals, biotech and high tech. We avoid such businesses by design. We believe that the better one can analyze a company, the more likely one is to be right.