Investment Philosophy

1) Understand the relationship between stock prices and corporate values

Valuation plays a significant role in KIMCO's investment process. Valuation is the origin of our absolute returns, and also contains a risk control mechanism. We also need to constantly observe the movements of stocks to understand what has been priced into those stock prices.

2) Anticipate what could drive price changes (events)

KIMCO defines an "event" as something that tips the supply/balance of a stock. Events are drivers of the stock prices, hence they are an important observation factor for us.

3) Contemplate changes in corporate value

The quality of the management and every management decision directly impacts a company's worth, and they also determine the medium to long term corporate value. As of late, ROE has been a focal point in Japan, and investors have started to assert pressure on corporates to increase their value efficiency. We will also be on a look out for companies that are destroying corporate value.

4) Observe changes in stock prices

Stock price movements do not always correlate with shifts in corporate value. We need to be aware of seasonal cycles as well as overshoots in bubble and burst situations so that we can properly value stock prices. This enables us to be alerted when there are "bargains".

5) Risk Management

The basis of risk management is to know a corporation well. Hence we stress the importance of bottom-up research and active fieldwork in order to witness firsthand corporate developments. In our investments, we always build-in a margin of safety, and prepare for unexpected outcomes.