Quality Growth Sell Discipline

Our investment committee continuously monitors performance of the companies in our client portfolios and works together to identify appropriate sell points. While there are no hard and fast rules, the following are typical catalysts for sale:

• Price Appreciation
  We will sell a portion of the position when it becomes over-weighted in the portfolio.  For tax sensitive clients, we take particular care to weigh the benefits of reduced risk and opportunity costs versus the client's budgeted capital gains and the tax cost of doing the trade.
• Fundamental Deterioration
  We regularly review holdings with a focus on earnings, dividends, and financial strength. A significant deterioration in the business prospects, performance, or financial strength is often a reason to sell.  We continually monitor stock-price performance, analysts' estimate revisions, earnings surprises and corporate events for early warning signs of fundamental deterioration.  A position will be sold if the stock loses its A-rating or eliminates its dividend.
• Enhanced Opportunities
  We may sell any stock and replace it with a stock that has more attractive risk/return characteristics.

It is important to note that Haverford’s investment process, due to its focus on long-term fundamentals, typically leads to very low portfolio turnover of 15–20% per year.