| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Coho Relative Value Equity delivered disappointing 2023 performance, returning 3.1% versus 26.3% for the S&P 500, as AI euphoria drove narrow market leadership concentrated in the Magnificent 7 stocks. The portfolio's valuation discipline created headwinds during a year when multiple expansion dominated returns over fundamentals. GLP-1 drug concerns weighed on overweight Health Care and Consumer Staples positions, while underweighting AI-beneficiary Technology and Communication Services sectors hurt relative performance. Dollar General was the largest individual detractor due to supply chain challenges, though management changes and fourth quarter recovery provide encouragement. The firm upgraded portfolio positioning in Q4, eliminating Baxter and J.M. Smucker while adding to high-conviction names including Medtronic, Nike, ThermoFisher, Disney, and Microchip Technologies. Despite near-term disappointment, Coho maintains conviction in their quality-focused, valuation-disciplined approach, noting attractive portfolio valuations position the strategy well for future participation. Historical precedent suggests concentrated market leadership often precedes difficult periods, supporting their defensive positioning and patient capital deployment philosophy.
Coho maintains conviction in their value-oriented approach focused on attractively priced, high-quality companies with consistent growth characteristics, believing this strategy will deliver asymmetric returns with lower risk over the long term despite near-term underperformance during periods of multiple expansion and narrow market leadership.
Coho expects their philosophy and process to provide more robust participation in 2024 should markets continue moving higher and strong downside protection should they move lower. They maintain conviction in their valuation discipline and quality focus despite 2023 disappointment.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 15 2025 | 2025 Q2 | AAPL, ABT, AMZN, BAX, CAG, COR, CVS, DG, DIS, GOOGL, MCHP, MDT, META, MMC, MSFT, NKE, NVDA, SJM, TMO, TOST, TSLA | AI, Concentration, Consumer Staples, GLP1, healthcare, multiples, technology, value | - | Coho's value strategy underperformed in 2023 as AI euphoria drove narrow market leadership in Magnificent 7 stocks while GLP-1 concerns hurt defensive sector overweights. Despite disappointing 3.1% return versus 26.3% S&P 500 gain, attractive portfolio valuations and quality focus position the strategy well for future participation with strong downside protection. |
| Mar 31 2025 | 2025 Q1 | AMGN, AZO, COR, DIS, GPN, PM, ROST, STZ, WRB | consumer, Defensive, healthcare, inflation, Stagflation, tariffs, value | - | Coho delivered 4.0% returns versus S&P 500's -4.3% decline by overweighting defensive sectors during stagflation concerns. Tariff fears and slowing growth benefited portfolio positioning in Healthcare and Utilities while creating headwinds for consumer-exposed names. Strong stock selection drove outperformance with twelve positions generating double-digit returns as AI euphoria subsided. |
| Dec 31 2024 | 2024 Q4 | AMZN, AZO, CVS, DG, GOOGL, MCHP, META, MSFT, MSTR, NVDA, UNH, WRB | Bubble, Concentration, defensives, technology, valuation, value | - | Coho's value-oriented strategy significantly underperformed in 2024 as Growth and Magnificent 7 concentration dominated markets. Despite stock-specific challenges and factor headwinds, the manager maintains valuation discipline and Demand Defensive positioning. They view current market concentration and valuations as unsustainable, expecting eventual mean reversion to favor their defensive approach when market returns moderate. |
| Sep 30 2024 | 2024 Q3 | AMZN, BAX, CVS, DG, KDP, KO, MCHP, NVDA, STZ, WMT | Beverages, defensives, earnings, healthcare, Quality, value | - | Coho's value strategy outperformed in Q3 after 18 months of underperformance driven by not owning Nvidia and stock selection issues. The manager expects broader market participation as mega-cap earnings growth normalizes, positioning defensively in Healthcare and Consumer Staples for the rate-cutting cycle while making tactical adjustments in beverages and healthcare holdings. |
| Jun 30 2024 | 2024 Q2 | ABT, AMGN, CAG, CVS, DG, DIS, GPN, NKE, NVDA, STZ, UNH | AI, Concentration, growth, healthcare, technology, value | - | Coho's value portfolio trails significantly in a market dominated by mega-cap tech concentration, but the firm sees this as creating an uncharacteristic valuation discount that will close as market breadth normalizes. They're adding to healthcare positions while maintaining their downside protection focus, confident their disciplined approach will be validated as it was in 2022. |
| Apr 15 2024 | 2024 Q1 | COR, DG, DIS, GWW, LOW, MDLZ, NKE, PRGO, UNH, UPS | conviction, downside protection, large cap, Quality, US, value | - | Coho Partners' value-oriented strategy underperformed in Q1 as growth and high-beta stocks continued outperforming. The concentrated portfolio of 25-30 quality companies emphasizes downside protection over short-term performance. Management maintains conviction in holdings like Nike and UnitedHealth despite headwinds, believing patient capital and disciplined value investing will generate superior risk-adjusted returns as market factors normalize. |
| Feb 23 2024 | 2023 Q4 | AAPL, ABT, AMZN, BAX, CAG, COR, CVS, DG, DIS, GOOGL, MCHP, MDT, META, MMC, MSFT, NKE, NVDA, SJM, TMO, TSLA | AI, Consumer Staples, GLP1, healthcare, Quality, technology, Valuations, value | - | Coho's value-focused strategy underperformed in 2023's AI-driven rally, returning 3.1% versus 26.3% for the S&P 500. Valuation discipline and sector positioning in Healthcare and Consumer Staples created headwinds against narrow tech leadership. The manager upgraded portfolio quality in Q4, maintaining conviction that fundamentals will ultimately drive returns and attractive valuations position the portfolio well for future outperformance. |
| Sep 30 2023 | 2023 Q3 | - | dividends, earnings, fundamentals, multiples, rates, value | - | Coho's value portfolio trades at an unprecedented 4x P/E discount to the S&P 500 after the worst relative performance in 23 years. The manager expects mean reversion as fundamentals replace multiple expansion in driving returns, with higher-for-longer rates likely pressuring market multiples while their discounted portfolio benefits from asymmetric upside potential. |
| Jun 30 2023 | 2023 Q2 | - | - | - | |
| Mar 31 2023 | 2023 Q1 | ABC, DG, GWW, LOW, MCHP, MDLZ, ROST, SYY, UNH, UPS | dividends, healthcare, Quality, technology, value | - | Coho employs a concentrated value strategy targeting 29 quality companies from a selective 250-stock universe. Using dividend discount models and conservative assumptions, the fund identifies undervalued opportunities in stable, growing businesses. The portfolio trades at attractive valuations with strong fundamentals across healthcare, technology, and consumer sectors. |
| Dec 31 2022 | 2022 Q4 | - | - | - | |
| Nov 16 2022 | 2022 Q3 | - | - | - | |
| Jun 30 2022 | 2022 Q2 | MCHP, ROST, SWK | - | - | |
| Mar 31 2022 | 2022 Q1 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q2 |
AIAI euphoria following ChatGPT release sparked impressive but narrowly led market rally in Information Technology sector. The excitement surrounding AI potential caused investors to ignore typical inverse correlation between rates and P/E multiples. AI-driven momentum propelled sectors Coho tends to underweight. |
ChatGPT Technology Momentum Multiples Euphoria |
GLP1Compelling obesity and cardiovascular protection data for GLP-1 drug class weighed heavily on Health Care and Consumer Staples sectors. Investors theorized widespread use would decrease demand for everything from hip and knee replacement to diabetes care to food consumption. These concerns contributed to wide spread between Economically Sensitive and Demand Defensive sectors. |
Obesity Healthcare Consumer Staples Diabetes Food | |
ValuePortfolio's valuation discipline was expected headwind in year when multiple expansion drove returns more than earnings and dividends. Selecting attractively priced stocks from advantaged universe provides asymmetric returns with lower risk over long term. Current attractive portfolio valuation relative to benchmark creates opportunity for fuller participation in coming years. |
Multiples Earnings Discipline Asymmetric Downside | |
| 2025 Q1 |
InflationRising inflation expectations due to tariff-induced trade tensions are constraining Fed policy. Prices have surged higher with six consecutive months of increases in manufacturing data. The Fed revised inflation expectations higher for 2025 while lowering GDP forecasts. |
Tariffs Fed Policy Manufacturing Stagflation Trade |
Trade PolicyTariff concerns have escalated trade tensions and are expected to stoke further inflation while slowing economic growth. The portfolio has exposure through Constellation Brands which imports 100% of beer brands from Mexico, though the manager expects reduced impact over time. |
Tariffs Mexico Import Trade Tensions Policy | |
RatesThe Fed cut rates by 100 bps in 2024 with current target at 4.25-4.50%. There is room to cut further but the agency is constrained by persistent elevated inflation. The dual mandate creates a conundrum between unemployment and inflation targets. |
Fed Funds Rate Cuts Dual Mandate Monetary Policy Inflation | |
| 2024 Q4 |
ValueCoho maintains adherence to valuation discipline despite underperformance, believing they would sacrifice downside protection by chasing Technology stocks higher. The market is objectively expensive by most measures with the S&P 500 trailing P/E at its fourth highest levels in the past 125 years. Studies show valuation often does not matter in the short term, but it always matters in the long term. |
Valuation Discipline Expensive P/E Long-term |
AIManager expresses skepticism about AI adoption despite transformative technologies being developed. Morgan Stanley's CIO survey highlights high hurdles to enterprise AI adoption including lack of actual use cases, prohibitive costs, unproven returns, and data security concerns. Yet the largest hyper-scalers are forging ahead with capital expenditure budgets 40% higher than expected. |
Enterprise Adoption Costs Returns Capex | |
EarningsForward earnings projections routinely overshoot actual results. The market tends to be optimistic about earnings growth with estimates for 2025 pointing to an above average 15% expectation for the S&P 500. As valuations rise, investors seek to justify them by assuming robust earnings growth to make forward multiples appear more palatable. |
Projections Growth Expectations Forward Multiples | |
| 2024 Q3 |
ValueThe manager emphasizes their value-oriented approach, noting that while they have underperformed growth-oriented indices, they expect a broadening of market participation as the earnings gap between the Magnificent 7 and other stocks narrows. They highlight their portfolio's stability and predictability compared to benchmarks. |
Value Earnings Quality Resilience |
RatesThe Federal Reserve cut rates by 50bps for the first time in four years, with projections for another 50bp reduction by year-end 2024. The manager discusses how rate-cutting cycles historically favor defensive sectors over economically sensitive ones, regardless of whether a recession follows. |
Rates Liquidity | |
BeveragesThe manager recalibrated beverage industry exposure by trimming Coca-Cola on valuation concerns despite strong execution, while increasing positions in Keurig Dr Pepper due to coffee business inflection and adding to Constellation Brands given compelling valuation and above-category beer portfolio growth. |
Beverages Food | |
| 2024 Q2 |
ValueThe manager emphasizes their value-focused approach, noting the portfolio trades at an uncharacteristically meaningful discount to the S&P 500 Index. They believe the market is mispricing risk and undervaluing the earnings, cash flow, and dividend growth potential of their portfolio. The valuation gap between their portfolio and the market is expected to close as market breadth expands. |
Value Discount Undervalued Mispricing Fundamentals |
AIThe letter discusses how AI euphoria has driven market concentration and growth stock outperformance since ChatGPT's unveiling in November 2022. The AI arms race has kicked the growth trade into high gear, causing the long-standing inverse correlation between interest rates and multiples to break down. NVIDIA's sales growth from $27 billion in 2022 to an expected $120 billion demonstrates the transformative impact of AI. |
AI ChatGPT NVIDIA Technology Growth | |
Risk AppetiteThe manager describes how risk appetite has dominated markets since mid-2016, accelerated by tax cuts and regulatory loosening. The pandemic response of unprecedented stimulus paired with zero rates rekindled animal spirits. Even as rates rose, AI excitement caused risk appetite to resume, breaking traditional correlations between rates and valuations. |
Risk Stimulus Animal Spirits Rates Correlations | |
| 2024 Q1 |
ValueThe manager emphasizes their value-oriented philosophy focusing on downside protection and lower volatility. They note that growth continues to outperform value and high beta outperforms low beta, which runs counter to their investment approach. The team remains committed to their value disciplines despite recent underperformance. |
Value Downside Protection Low Volatility Quality Shareholder Friendly |
BuybacksNike continues executing its four-year $18 billion stock repurchase plan as part of consistent capital returns to shareholders. The manager views this as evidence of management's commitment to shareholder value creation alongside dividend increases. |
Stock Repurchase Capital Returns Shareholder Value | |
| 2023 Q4 |
AIAI euphoria following ChatGPT release drove Information Technology sector returns over 40% in 2023. The excitement surrounding AI potential caused investors to ignore typical inverse correlation between rates and P/E multiples. AI-related stocks dominated market performance but created narrow market breadth. |
Technology ChatGPT Growth Momentum Valuations |
GLP1Compelling obesity and cardiovascular protection data for GLP-1 drug class weighed heavily on Health Care and Consumer Staples sectors. Investors theorized widespread drug use would decrease demand for everything from hip and knee replacement to diabetes care to food consumption. |
Healthcare Obesity Pharmaceuticals Consumer Staples Food | |
ValuePortfolio emphasizes valuation discipline as critical to providing downside protection. Manager believes selecting attractively priced stocks from advantaged companies provides asymmetric returns with lower risk. Valuation discipline was a headwind in 2023 when multiple expansion drove returns. |
Valuation Downside Protection Risk Management Fundamentals Quality | |
| 2023 Q3 |
ValueThe manager emphasizes their value-oriented approach, highlighting that their portfolio trades at an unprecedented discount to the S&P 500. They believe fundamentals ultimately drive returns and expect mean reversion in their relative valuation discount. |
Value Fundamentals Discount Mean Reversion |
DividendsThe portfolio has achieved 6.8% dividend growth over the past ten years, which the manager believes is sustainable going forward. They emphasize dividends as a key component of long-term returns alongside earnings. |
Dividend Growth Income Sustainable | |
EarningsThe manager expects portfolio earnings growth of 9.3%, falling between the S&P 500's 12.3% and Russell 1000 Value's 7.7%. They believe their earnings projections are more reliable than index projections and that fundamentals will ultimately drive returns. |
Earnings Growth Fundamentals Reliability |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| AAPL | The Magnificent 7 (Apple, Microsoft, Nvidia, Google, Amazon, Meta, and Tesla) doesn't change the numbers meaningfully as those seven companies dominated performance the past year. |
| MSFT | The Magnificent 7 (Apple, Microsoft, Nvidia, Google, Amazon, Meta, and Tesla) doesn't change the numbers meaningfully as those seven companies dominated performance the past year. |
| NVDA | The Magnificent 7 (Apple, Microsoft, Nvidia, Google, Amazon, Meta, and Tesla) doesn't change the numbers meaningfully as those seven companies dominated performance the past year. |
| GOOGL | The Magnificent 7 (Apple, Microsoft, Nvidia, Google, Amazon, Meta, and Tesla) doesn't change the numbers meaningfully as those seven companies dominated performance the past year. Facebook and Google were both included in the Russell 1000 Value benchmark for the first six months of the year and explains more than 20% of our underperformance relative to that index. |
| AMZN | The Magnificent 7 (Apple, Microsoft, Nvidia, Google, Amazon, Meta, and Tesla) doesn't change the numbers meaningfully as those seven companies dominated performance the past year. |
| META | The Magnificent 7 (Apple, Microsoft, Nvidia, Google, Amazon, Meta, and Tesla) doesn't change the numbers meaningfully as those seven companies dominated performance the past year. Facebook and Google were both included in the Russell 1000 Value benchmark for the first six months of the year and explains more than 20% of our underperformance relative to that index. |
| TSLA | The Magnificent 7 (Apple, Microsoft, Nvidia, Google, Amazon, Meta, and Tesla) doesn't change the numbers meaningfully as those seven companies dominated performance the past year. |
| CVS | We have written multiple times this year about CVS Health Corporation as well, but by far the largest detractor at the stock level was Dollar General. |
| DG | From the time of our original purchase in September 2015 to the end of 2022, Dollar General was one of the largest positive contributors to portfolio performance. That changed markedly in 2023 when the success the company enjoyed during the pandemic caught up with it in the form of supply chain bottlenecks due to outsized growth that were made worse by strategic and operating decisions of newly installed management. We were too early when we added to our position in June. In October, the company's Board of Directors reinstated Todd Vasos to the CEO role he had departed less than a year earlier. We added to the position again in October. After a miserable nine months, the stock was one of the top three performers in the portfolio against both the S&P 500 and Russell 1000 Value indices in the fourth quarter. |
| BAX | We eliminated our position in Baxter International and redeployed that capital into a new position in Abbott Labs which we view as having a superior management team, a more diversified business, and a favorable balance sheet. |
| ABT | We eliminated our position in Baxter International and redeployed that capital into a new position in Abbott Labs which we view as having a superior management team, a more diversified business, and a favorable balance sheet. |
| SJM | We also eliminated our position in J.M. Smucker due to its expensive and ill-timed acquisition of Hostess Brands. Our food stocks, most notably ConAgra Brands and J.M. Smucker, suffered in part from what we believe are exaggerated concerns regarding the impact of obesity drugs on calorie intake and food preferences. |
| COR | Along with trims of top performing names like Cencora and Marsh & McLennan, this provided funding for adds to high conviction names where we believe the market underappreciates the long-term return potential. |
| MMC | Along with trims of top performing names like Cencora and Marsh & McLennan, this provided funding for adds to high conviction names where we believe the market underappreciates the long-term return potential. |
| MDT | Additions in the quarter included Medtronic where pipeline progress is helping the company drive toward its organic revenue and margin targets. |
| NKE | Additions in the quarter included Nike where the China business is recovering and where further margin opportunity exists. |
| TMO | Additions in the quarter included ThermoFisher Scientific where transient headwinds are obfuscating long running secular tailwinds. |
| DIS | Additions in the quarter included Walt Disney which is on the cusp of streaming profitability. |
| MCHP | Additions in the quarter included Microchip Technologies where execution remains strong and shareholder returns generous. |
| CAG | Our food stocks, most notably ConAgra Brands and J.M. Smucker, suffered in part from what we believe are exaggerated concerns regarding the impact of obesity drugs on calorie intake and food preferences. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
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| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
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| Industry | Prev Quarter % | Current Quarter % | Change |
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