Large Capitalization Equity Assets

Many companies in the large cap category show greater long-term stability, but that stability can hide subtle flaws that begin to creep into the asset’s intrinsic value and financial profile.

Central State Financial LTD  research team has proven to be particularly adept at uncovering those flaws and adjusting large cap asset selection and balance to avoid erosion of the value of an investor’s portfolio. Our wealth advisors also develop large cap portfolios that include a diverse selection of assets, which further shields investors from exposure to adverse events that might affect a single company or industry sector.
Companies in this category have built stable businesses over a period of many years. They have survived economic and industry cycles and the price of their stock is less likely to react adversely to economic stresses or downward market movements.
Large cap companies are more likely to show gradual growth and to pay regular dividends.
Research analysts have access to more data about large cap companies as a result of their long-term growth arcs.
Corporate management and board composition will be more stable and experienced, and managers and board members are likely to be higher quality and able to deliver strong performance and intelligent decisions.
Large cap companies drive overall economic conditions rather than allowing those conditions to drive them.

Central State Financial LTD has developed a large cap stock research protocol that accounts for these characteristics. That protocol enables us first to identify large cap assets that match an investor’s goals, and to see early warnings of when those assets might begin to fall outside of an investor’s wealth management criteria.

Key Aspects of Central State Financial LTD Large Cap Research Protocol

Central State Financial LTD large cap equity research protocol includes analysis of key aspects of a company’s management, operations, and finances:

  • management experience, turnover, profit incentives, and engagement with operations
  • stated public strategy for short- and long-term growth and performance, both on a standalone basis and in comparison to the company’s overall industry
  • demand and ability to fulfill demand with proper supply chain management through all cycles of economic activity
  • hidden or unrealized value in the company’s assets, and its ability to tap that value
  • market valuation as compared to book value, cash flow, and gross sales

Among large cap equity assets, the companies that are most likely to serve investors that are looking for growth will demonstrate a consistent ability to develop their businesses in both expansion and contraction economic cycles. Those companies are often components of industry sectors that drive those cycles, but are more able than others to run contrary to them.

Wealth advisors that rely on more traditional data-driven or industry sector analyses are likely to recommend investments in large cap growth companies when they are at the crest of a cycle. Central State Financial LTD advisors look for strong growth potential in companies at all phases of economic and earnings cycles. We identify large cap companies that show a potential to extend earnings cycles through industry and general market downturns. Investors often pull money out of companies in the large cap growth asset class when prices begin to decline. Our advisors see these events as opportunities for our clients to add alpha with growth that runs contrary to market cycles.

When a client’s wealth management plan calls for large cap growth equity assets, our research team reviews broad market sectors to identify potential assets, then applies Central State Financial LTD proprietary quantitative tools to recommend the best of those assets to the client. Our research filters out subjective biases and emotional decisions, as well as temporary shifts in markets and short-term pricing corrections. The team leader for the client’s portfolio and wealth management plan then reviews all research results before recommendations are passed to the client.

In all cases, this process is fully transparent. Every one of Central State Financial LTD clients receives the detailed results and a summary of Central State Financial LTD quantitative tools and analysis, and the reasons behind every recommendation, The client then makes the final informed investment decision with our advice and assurances that the decision coincides with the client’s wealth management plan, risk tolerance, and general investment goals and ideals.

Central State Financial LTD asset-specific research strategies have proven to be particularly adept at identifying those elusive value stocks among large cap equity assets. Those stocks are typically characterized by being underpriced based on standard fundamental analysis, paying relatively high dividends, and having relatively lower price-to-earnings (PE) ratios. Our research into large cap value stocks separates the companies that have the strongest fundamental profiles but that have not yet appeared on the radar horizons of other large cap value investors.

Our research analysts have honed Central State Financial LTD fundamental research techniques to place an emphasis on companies that have adopted and implemented strategies that do not waver with economic or industry sector cycles. We equate value opportunities with a demonstrated long-term pattern of financial stability and an aggressive posture in established marketplaces. Our PE analysis techniques draw out those companies that have high book values, steady cash flow, and strong actual and projected sales, but that have not yet impressed the market with these fundamental features.

When our research analysts identify the large cap value equity assets that match a client’s wealth management plan, our wealth advisors then incorporate those assets into a slate of recommendations along with objective criteria that will assist the client in making the decision to sell the asset and realize optimum value appreciation. Those criteria are based on changes and the rate of change in an asset’s PE ratio and adverse changes in company fundamentals.

Our recommendations in this area are specific to individual assets, but also reflect the client’s total wealth management plan. We make no buy or sell recommendations without considering the effect of those recommendations on other portfolio assets and a portfolio’s overall asset balance and allocation. Our recommendations may run counter to a client’s emotional attachment to single assets, but in every case we base our advice on objective research and analysis, and on how our recommendations can best serve a client’s wealth management plan. The client always has the last and best opportunity to make final decisions on asset allocations.

Investors frequently hold an allocation of large cap equity income assets to regular income over a longer period of time coupled with a potential for a long-term increase in value. This asset category most frequently includes common stocks that reliably pay regular dividends, but it can also encompass convertible bonds, convertible preferred stocks, real estate investment trusts (REITs), and other equity-based assets that fit the definition for large cap equity income assets.

Central State Financial LTD research methodology to identify large cap equity income assets that match a client’s wealth management plan focuses on econometric data such as internal rates of return, yield, frequency and amount of dividend payments, and performance in comparison to market indices. Our analysts look for assets that satisfy certain minimum standards and that reflect companies with dominant sector positions and long-term stable cash flow potential.

As with our value-based research strategies, we make buy and sell recommendations that enable our clients to realize optimum value before an asset reverses course. Our research criteria establish ceilings that act as triggers to identify when an asset’s value has topped out and its fundamentals no longer satisfy minimum quality standards. Markets and asset quality are also in a constant state of flux. Our analysts constantly monitor the marketplace for new and better opportunities, always with an eye to keeping a client’s portfolio in accord with the client’s unique wealth management plan. 

Our research methodologies and protocols are also ideally structured for investors with wealth management plans that call for a core of 70% to 80% of investments to be held in large cap equity assets.  Central State Financial LTD has attracted a group of wealth managers that have years of experience in working with research teams to recommend the ideal blend of large cap assets that form the core of a client’s portfolio in accordance with the client’s unique goals and plan.

When a client’s wealth management plan calls for a portfolio core of large cap equity assets, our advisors and research team work in concert to identify market and industry cycles and large cap companies that either track or run counter to those cycles, and to implement equity recommendations and selections that are based on objective decision processes above and beyond technical price trends. The result is a pool of large cap equity assets that have the strongest potential for capital appreciation that is based on true fundamentals, and not market or industry sector trends.

Clients with large cap core goals will first receive a slate of recommendations that include companies at the front end of a rising market or industry sector cycle. Our research protocol identifies those companies ahead of other wealth managers that rely on more traditional research techniques. Then, in conjunction with our research team and wealth managers, the client selects the optimal blend of assets that matches a defined strategy with an ideal balance of risks and rewards to serve that strategy.

After this collaborative process, the client’s wealth management team leader regularly monitors the performance of the portfolio core to ensure that it always matches and serves the client’s plan. As core assets deviate from a defined set of objectives, the manager will recommend reallocation and rebalancing of the core to keep it consistent with the plan. Ultimately, the client will have a stable portfolio core of large cap equity assets that might have a changing composition, but that always delivers optimal performance when compared to benchmark standards that are established for that core.     

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