Sound Shore's process strives to:
Outperform the market averages over a full market cycle
Outperform the competition and finish in the top quartile of performance
Generate positive investment results while keeping emphasis on low risk
Teamwork is critical at Sound Shore. Our seven investment professionals, with more than 125 years of combined equity research experience, work together to:
Identify the least expensive stocks based upon absolute P/E and P/E versus a company's historic norms
"Value check" to confirm each stock's valuation attractiveness
Determine company-specific drivers of value and model norm earnings power for each holding
Set stock-specific valuation targets based upon our estimates of earnings and cash flow priced at "norm" multiples
Sell when target valuations are achieved or when our investment thesis changes
Price/Earnings (P/E) ratio is the ratio of a stock's current price to its per-share earnings.
Investment Orientation - Low valuation, absolute and relative to a company's own history
Analytical Process - Bottom-up
Market Capitalization - Medium to large
Portfolio Holdings - Approximately 40 equities
Portfolio Turnover - Approximately 50% - 75%
- Representation of a single issue usually does not exceed 5%
- Industry concentration typically does not exceed 25%
- No sector constraints
Investment Restrictions - No derivative or short positions
Portfolio turnover may not be limited during periods of significant redemptions or when, based upon investment considerations, the Fund's managers deem it necessary to make changes to the Portfolio's holdings.
Disciplined Fundamental Value Investors Since 1978
Sound Shore Management, Inc. was founded on the belief that the pursuit of a disciplined, value-oriented investment style provides the opportunity for investors to reap the full-cycle rewards of the equity markets, while maintaining a keen focus on risk. Our strategy is time tested since 1978 and is built upon four critical components:
Having experienced many periods of extreme optimism and pessimism over the past nearly thirty years as investment advisers of Sound Shore Management, we remain committed to our contrarian value style. We resist being either bullish or bearish, but rather remain alert to the opportunities that each market can provide. This discipline is a critical factor to our success over time.
We believe our low valuation approach is the ultimate controller of risk. Sound Shore's process focuses on financially sound companies that have under-performed and lost their Wall Street sponsorship, but not their earning power. We evaluate risk on a company by company basis, and the portfolio has historically provided some protection from individual equity declines.
Long-Term Investment Rewards
As long-term investors, Sound Shore's goal is to create wealth and preserve it. This requires a steadfast approach that resists market timing and investing in fads, and allow the power of a consistent investment style to compound over time. Importantly, our risk-averse nature does not preclude us from enjoying the benefits of investing in the stock market. A $10,000 investment in the Sound Shore Fund (Investor Class) at inception in 1985 would now be worth $322,239 as of June 30, 2019.*
Alignment With Our Investors
The employees of Sound Shore Management, Inc. are significant shareholders in Sound Shore Fund. The firm's profit sharing plan, which includes all employees with more than 1 year of service, is 100% invested in the Sound Shore Fund. As well, the firm's partners also have significant investments in the Fund.
*Past performance is not predictive of future results. For more information on performance. please see
The Performance & Distributions section