James Cannon Carr, Jr.

CornerCap Investment Counsel (CIC) employs a value-oriented investment approach. Though not limited by sector, geography or market-cap, the firm tends to invest in the stocks of US mid-cap companies in the producer manufacturing, electronic technology, industrial services and finance sectors. CIC maintains a very low turnover rate.Their equity research process begins with an objective, quantitative evaluation of a broad array of stocks. Their proprietary research, Fundametrics, screens and ranks stocks according to specific valuation criteria and defines the firm's top 10% most attractive investment ideas, independent of sector. This group is then screened for diversification to protect against extreme overweighting of any given sector. CIC selects stocks in two ways. One method relies on a qualitative overlay, that reviews the inputs into Fundametrics and assesses a company's management, competitive position balance sheet and market expectations. They prefer stocks that have fallen out of favor but show a combination of attractive attributes. The second method relies solely on Fundametrics for buy and sell decisions.Fundametrics screens companies on over 30 investment factors. CIC relies most heavily on the following 12 factors: estimates revision, earnings momentum, growth-to-value ratio, price-to-earnings, normalized price-to-earnings, price-to-free cash flow, price-to-cash flow and enterprise multiple. For stocks, the firm continues to measure both the quantitative and qualitative indicators. When a stock falls to the bottom 30% of their valuation process (or bottom 50% for their pure Fundametrics-driven method), the stock no longer meets their criteria and their sell disciplines are implemented.CIC primarily uses bonds in structuring balanced accounts. They seek to maximize the potential total return while controlling risks. For taxable clients, an important factor is the client's marginal tax rate. They also consider potential default risk. CIC looks for high-quality, investment-grade bonds. Any significant deterioration in a bond's credit quality is closely monitored and the bond is sold if appropriate. CIC avoids restrictive call features.