Investment Style/ Philosophy
Pinnacle's Equity strategy is based on the concept that undervalued securities can be found in any sector of the equity market. While we utilize several traditional measures of valuation, we believe that these traditional measures, while still useful, cannot completely address all of the opportunities that exist in the domestic equity market today. Indeed, over the last thirty years, the security markets have changed, accounting standards have been redefined, and sectors that never existed before now drive market performance. Pinnacle’s All Cap equity strategy strives to utilize both traditional methodologies and innovative valuation measures to build diversified portfolios which deliver superior performance. Regardless of the valuation approach, we employ a consistent bottom-up style that is based on our proprietary fundamental analysis. For a portion of the portfolio, we utilize traditional valuation measures such as low price/book ratio and low price/sales ratio. When we identify attractive securities using these measures, we also look for a catalyst that indicates a change or improvement in the fundamental business health of the company. As opposed to many other managers, we do not focus on a low price/earnings ratio, as we believe that this can often times be a misleading indicator. When a firm has a low P/E, we have found that historically it can often represent the “peak” of a firm’s earnings cycle and actually signal an upcoming decrease in earnings.

Investment Process
We begin with traditional value measures: Price/Book, Price/Sales. Then, we analyze Price/Cash Flow and Price/Private Market Value for expanded valuation companies. Our universe of potential holdings consists of securities with a minimum market capitalization of $100 million and no upside market capitalization limit (at the time of purchase). We apply Pinnacle’s expanded and traditional valuation analysis which yields a watch list of 200 to 300 names at any one point in time. If a company has a positive catalyst, it is added to the portfolio which normally contains 50-70 issues. Purchase decisions are based on company and industry fundamentals, valuation, and fulfillment of our minimum investment criteria. Our All Cap strategy is designed to be a long-term holder of securities. Our sell discipline is comprised of three categories: valuation, company fundamentals and portfolio diversification.

Client Communication
We encourage client meetings as frequently as needed in order to build the trust that is essential in any client-advisor relationship. We generally have met with clients one or two times a year, depending on the client’s needs. Also, conference calls, written updates, etc., are important elements of our client communication strategy. Thomas Passios, Senior Portfolio Manager and Ken Sobolewski, our Director of Marketing, would be the primary contacts for this account. Two senior professionals will be assigned to the account from the All Cap team. Our Director of Marketing will also service the account and coordinate the client’s service strategy. These professionals will be available for all meetings related to the account throughout the year. Clients will also have access to many other members of the Pinnacle team to assist them with various issues, such as: contracts, billing, and operational issues.

Team
Pinnacle's U.S. Equity All Cap team consists of Thomas Passios (Senior Portfolio Manager), Don Dowd (Portfolio Manager/Analyst) andTim Piacentini (Senior Research Analyst).