Position Count and Concentration Philosophy

In this episode of CIO Perspectives, host Sid Ahl speaks with portfolio manager Mike Poggi, who manages the Brown Advisory Large-Cap Sustainable Value strategy, about the return of value investing and why quality stocks are being overlooked in an AI-focused market. Mike shares how sentiment toward value has shifted, why free cash flow and balance sheet strength matter more today, and how recent pullbacks in Software and other industries are creating opportunities for disciplined investors. They also discuss the challenges facing quality-focused strategies, the role of sustainability in cash flow durability, and the catalysts emerging across Industrial, Technology and Health Care companies.

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The views and opinions expressed in this podcast are those of the speakers and do not necessarily reflect those of Brown Advisory. These views are not intended to be and should not be relied upon as investment advice, nor are they intended to be a forecast of future events or a guarantee of future results. The information provided in this podcast is not intended to be, and should not be considered, a recommendation or suggestion to engage in, or refrain from, a particular course of action or to make or hold a particular investment or pursue a particular investment strategy, including whether or not to buy, sell, or hold any securities mentioned. It should not be assumed that investments in such securities have been or will be profitable. To the extent specific securities are mentioned, they have been selected by the author on an objective basis to illustrate views expressed in the commentary and do not represent all the securities purchased, sold, or recommended for advisory clients. The information contained herein has been prepared from sources believed reliable but is not guaranteed by us as to its timeliness or accuracy and is not a complete summary or statement of all available data. This piece is intended solely for our clients and prospective clients, is for informational purposes only, and is not individually tailored for or directed to any particular client or prospective client.

Alternative Investments may be available for Qualified Purchasers and Accredited Investors only.

Risk of Capital Loss: Private investments are characterized by a high degree of risk, volatility and illiquidity due, among other things, to the nature of the investments.

Portfolio information based on a representative Large-Cap Sustainable Value account as of 03/06/2026.

Sustainable investment considerations are one of multiple informational inputs into the investment process, alongside data on traditional financial factors, and so are not the sole driver of decision-making. Sustainable investment analysis may not be performed for every holding in the strategy. Sustainable investment considerations that are material will vary by investment style, sector/industry, market trends and client objectives. Certain strategies seek to identify companies that they believe may be desirable based on our analysis of sustainable investment related risks and opportunities, but investors may differ in their views. As a result, these strategies may invest in companies that do not reflect the beliefs and values of any particular investor. Certain strategies may also invest in companies that would otherwise be excluded from other funds that focus on sustainable investment risks. Security selection will be impacted by the combined focus on sustainable investment research assessments and fundamental research assessments including the return forecasts. These strategies incorporate data from third parties in their research process but do not make investment decisions based on third-party data alone.

Sectors are based on the Global Industry Classification Standard (GICS) sector classification system. The Global Industry Classification Standard (GICS) was developed by and is the exclusive property of MSCI and Standard & Poor’s. “Global Industry Classification Standard (GICS), “GICS” and “GICS Direct” are service marks of Standard & Poor’s and MSCI . “GICS” is a trademark of MSCI and Standard & Poor’s.

Buyback yield is the percentage of a company’s market value returned to shareholders through share repurchases.

Capital discipline is the way a company manages leverage, allocates cash and maintains balance sheet flexibility to support long-term value creation

Capital expenditures (CapEx) are funds used by a company to acquire, maintain or upgrade physical assets such as property, equipment or technology.

Dividend yield is the annual dividend paid by a company divided by its share price, expressed as a percentage.

EBITDA (earnings before interest, taxes, depreciation and amortization) is a measure of a company’s operating performance used to evaluate profitability and compare companies across industries.

Enterprise value (EV) is the combined value of a company’s equity and net debt. 

Earnings Per Share (EPS) is a financial metric that indicates the profitability of a company. It is calculated by dividing the company’s net income by the number of outstanding shares of its common stock.

EV/EBITDA is a valuation metric that compares a company’s enterprise value to its EBITDA, used to assess relative value across companies.

Free cash flow (FCF) is the cash a company generates after capital expenditures that can be used for dividends, buybacks or reinvestment. 

Free cash flow conversion is the percentage of EBITDA that becomes free cash flow, used to evaluate quality and cash efficiency. 

Free cash flow yield is free cash flow divided by equity value, used to measure valuation and expected return. 

Index reconstitution is the annual process where companies are added to or removed from benchmarks such as the Russell 1000 Value Index. 

Leverage is the amount of debt a company carries relative to earnings or cash flow. 

Margin of safety is the valuation cushion that helps protect against downside risk in value investing.

Market Capitalization is the total value of a company’s outstanding shares. 

Net leverage is a measure of debt adjusted for cash relative to earnings or cash flow. 

Organic growth refers to revenue or earnings growth generated from a company’s existing operations, excluding acquisitions or divestitures.

Quality investing is an investment approach focused on companies with durable earnings, strong balance sheets and stable free cash flow. 

Return on invested capital (ROIC) is a measure of how efficiently a company generates profit from the capital it deploys.

Russell 1000® Value Index is a market index that measures the performance of large- and mid-cap U.S. value stocks. The Frank Russell Company (“Russell”) is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell ® is a trademark of Frank Russell Company. Neither Russell nor its licensors accept any liability for any errors or omissions in the Russell Indexes and/or Russell ratings or underlying data and no party may rely on any Russell Indexes and/or Russell ratings and / or underlying data contained in this communication. No further distribution of Russell data is permitted without Russell’s express written consent. Russell does not promote, sponsor or endorse the content of this communication. 

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