Pitchbk 11132017 REV - Symons .SYMONS CAPITAL MANAGEMENT SIX-STEP INVESTMENTPROCESS 4 STEP ONE Macro

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  • SYMONS CAPITAL MANAGEMENT

    1

    Investment Risk ManagersGenerating Above-Benchmark Returns

    with Below-Benchmark Risks Over Full Market Cycles.

    Symons Capital Management, Inc.650 Washington Road, Suite 800

    Pittsburgh, PA 15228412-344-7690

    www.symonscapital.com

  • SYMONS CAPITAL MANAGEMENT

    I. Overview

    1 Symons Capital Management

    II. Our People, Process, Risk Management and Performance

    2 Representative Institutional Client List

    3 Investment Team

    4 Six-Step Investment Process

    5-6 STEP ONE Macro Economic and Market Analysis

    7 STEP TWO Initial Idea Generation

    8 STEP THREE Preliminary Valuation

    9-10 STEP FOUR Exhaustive FundamentalAnalysis

    11-12 STEP FIVE Portfolio Construction and Risk Management

    13 STEP SIX Portfolio Oversight and Sell Decision

    14 CONCLUSION: Why Symons Capital Management

    15 Market Cycle Returns Value

    15.a Risk Statistics Value

    15.b Performance Statistics Value

    15.c Portfolio Statistics Value

    16.a Small Cap Value Overview

    16.b Performance Statistics Small Cap Value

    16.c Portfolio Statistics Small Cap Value

    III. Appendix

    17-22 Colleagues Biographies

    23-25 Disclosures

    CONTENTS

    WWW.SYMONSCAPITAL.COM

  • OVERVIEW

    PEOPLE:Chief Investment Officer in place since January 2000. Proven, stable and skilled investment team in placefor next two decades.

    PROCESS:Intellectually independent, macro top-down and fundamental bottom-up, holistic risk/reward researchprocess that is disciplined, flexible and repeatable, that steers portfolios away from clouds on the horizonand toward opportunities.

    RISK MANAGEMENT AND PERFORMANCE:Boutique equity manager that has generated material capital protection and material net-alpha over fullmarket cycles.

    COMMITMENT:SCMs principals and retirement plan invest almost $8.9 million of their assets side-by-side with clients.

    SYMONS CAPITAL MANAGEMENT

    OVERVIEW

    WWW.SYMONSCAPITAL.COM 1

  • SYMONS CAPITAL MANAGEMENT

    1st Summit Bank

    AmeriServ Trust and Financial Services

    Benefit Plans Administrative Services, Inc.

    Buchanan Ingersoll & Rooney

    Community Bank Systems

    Counsel Trust Company

    Lawyers Mutual Insurance Co

    Quatrini Rafferty

    REPRESENTATIVE INSTITUTIONAL CLIENT LIST

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    PUBLIC FUNDS / TAFT HARTLEY

    Western PA Electrical Employees

    Botstiber Foundation

    Rancho Research Institute, Inc.

    Los Angeles Firemens Relief Association

    Third Presbyterian Church

    Visiting Nurse Association of Northern New Jersey

    Westminster Presbyterian Church

    Note: The clients identified in this List were selected based on a variety of factors, including name recognition, industry, geographic region and investmentmandate. The investment performance of the accounts managed by Symons Capital, including those identified on this List, was not considered. The Listis neither a statement of a clients experience with, nor an endorsement of, Symons Capital by the clients identified in the List. It is not known whether theclients identified in the List approve or disapprove of Symons Capitals advisory services.

    CHARITABLE

    CORPORATE / BUSINESS

  • 3

    INVESTMENT TEAM

    Colin E. Symons, CFAChief Investment Officerand Portfolio ManagerYears of experience: 20

    Richard F. Foran, MPHVice President, ResearchYears of experience: 13

    Sector Coverage:HealthcareIndustrialsUtilitiesFinancialsReal Estate

    Joshua I. Armstrong, CFAVice President, ResearchYears of experience: 9

    Sector Coverage:TechnologyMaterialsConsumer StaplesTelecom

    Matthew S. Wickline, CFAVice President, ResearchYears of experience: 8

    Sector Coverage:Consumer DiscretionaryEnergy

    SYMONS CAPITAL MANAGEMENT

    INVESTMENT TEAM

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  • SYMONS CAPITAL MANAGEMENT

    SIX-STEP INVESTMENT PROCESS

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    STEP ONE Macro Economic and Market Analysis

    Repeatable FLEXIBLE investment process that generates consistent long-term capital protection and net alpha IN CHANGING MARKETS.

    Practical top-down forward-looking macro views of long-term economic,business and demographic cycles data and short-term economic data toidentify risks and opportunities in order to steer the ship in the right direction

    STEP TWO Initial Stock Idea Generation Cull entire publicly traded stock universe for initial ideas using macro ideas,proprietary quantitative screens, and opportunistic circumstances

    STEP THREE Preliminary Stock ValuationExamine initial stock ideas using standard analysts spreadsheets(e.g., revenue and margin trends) and quality of business factors(e.g., barriers to entry) to identify potentially attractive stocks

    STEP FOUR Exhaustive Fundamental Stock AnalysisExhaustive, critical fundamental analysis of remaining stocks: detailedanalysis of SEC filings, conference call transcripts, managements businessplan, etc., to identify both opportunities and potential problems (red flags)

    STEP FIVE Portfolio Construction and Risk Control Build economic-risk diversified portfolio, going beyond traditionalsector diversification to reduce coincident economic drivers

    STEP SIX

    RESULT:

    Portfolio Oversight and Sell DecisionOther side of risk-reward analysis monitor and sell stocks atappropriate time and valuation, based on macro and fundamentalanalysis of evolving market environments

  • SYMONS CAPITAL MANAGEMENT

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    INVESTMENT PROCESS

    STEP ONEMACRO ECONOMIC ANALYSIS (Long-Term) Develop practical, top-down, holistic view of the investment world

    Read broad-ranging news sources such as Hedgeye, Zero Hedge, Bloomberg, and individual commentators

    Think independently about big picture economic data, demographics, cycles, interest rates, inflation, Fed policy, stock valuations to weigh risks and opportunities

    Use developed long-term macro overview to build investment themes/portfolio tilts to best reach the goal ofsuperior full market cycle risk/reward management

    Steered Away From Risks:

    1999 - Exited technology stocks

    2004 - Exited housing stocks

    2007 - Exited financial stocks

    2014 - Exited energy stocks

    Steered Toward Opportunities:

    1999 - Added housing stocks

    2000-2002 - Added energy stocks

    2006 - Added food and recession-resistant stocks

    2008 - Added high quality (stable revenue/low debt) stocks

  • SYMONS CAPITAL MANAGEMENT

    INVESTMENT PROCESS

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    STEP ONEMACRO ECONOMIC ANALYSIS (Short-Term) Focus on shorter-term time horizons by considering Growth, Inflation and government Policy data (GIP),

    to position portfolio to protect against risks of market environment shifts while identifying sensibleopportunities

    Consider GROWTH data including GDP, PMI and ISM reports; INFLATION data including dollar strength,CPI and commodity prices; and Fed/Treasury POLICY monetary and fiscal guidance; all to help gaugeshort-term market change possibilities

    Use technical momentum analysis (e.g., volume, volatility, trends) to help determine when market or sectormomentum is changing, to identify potential turning or inflection points relevant to investment themes andsector tilts

    Review stocks in identified sector to think about whether and how to scale into or out of sector

    STEP ONE SUMMARYSTEP ONE provides macro insights for building big picture, long-term and short-term, roadmaps for market and sector risk/reward tilts in order to manage through market changes.

  • SYMONS CAPITAL MANAGEMENT

    INVESTMENT PROCESS

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    STEP TWOINITIAL IDEA GENERATION (5-50 stocks)

    Multiple approaches are used to identify possible investment ideas, with varying emphasis depending on particular circumstances and potential opportunities:

    Use STEP ONE insights to focus on particular sectors, industries and stocks tilt or weight screens to the environment

    Use internally developed custom screens to look at a stocks valuation vs. its own historical valuation, itshistorical valuation relative to the market, industry and sector, its shareholder yield over time, and its relativeperformance over time

    Use general reading and news criteria screens such as earnings announcements, 52-week lows, suddenprice drops

  • SYMONS CAPITAL MANAGEMENT

    INVESTMENT PROCESS

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    STEP THREEPRELIMINARY VALUATION (0-5 stocks)

    Goal is to determine whether a STEP TWO stock potentially merits STEP FOUR consideration:

    Generally examine fundamental financial and business factors of each company

    Manipulate standard research analysts spreadsheet data, altering assumptions to look at stocks on a cashflow and enterprise valuation (debt plus equity) basis over time and range of possibilities going forward

    Examine factors such as revenue growth, operating and net profit margins, balance sheet strength and financing costs, efficiency of operations, barriers to entry and industry economics, chart of stock price movement

    Examine factors over the years, business issues, cash flow stability based on sustained product need,shareholder yield (dividends + stock buybacks + debt reduction/market cap)

  • SYMONS CAPITAL MANAGEMENT

    INVESTMENT PROCESS

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    STEP FOUREXHAUSTIVE FUNDAMENTAL ANALYSIS

    Exhaustive analysis of SEC filings, MD&A, conference call transcripts, and other data and news sources:

    Go beyond initial quantitative a