Acker Finley uses a proprietary economic model to determine the fair value of a company. It's what powers Acker Finley funds – and distinguishes our investment approach – helping generate returns, year after year, with limited risk.
The model works by analyzing the financial structure – defined by the balance sheet, earnings and market value – of a company. Unique to the model is the calculation of an amount of money the balance should earn given its financial structure – what we call theoretical or benchmark earnings for the balance sheet. By comparing what a company is expected to earn against what it “should” be earning (benchmark earnings) reveals how efficient that balance sheet is in generating earnings and, by extension, how it should be valued.
Using data from our economic model, we further refine our analysis by using statistical methods to compare all stocks against each other in order to derive a Model Price for each company