DISCLOSURES

---

 Steven Feldstein and Associates (“SFA”)  is a registered investment adviser with the United States Securities  and Exchange Commission.  SFA has made Investment Adviser Notice filings  in the following states: CT, NJ and NY. Investment advisory services  described herein are not offered, nor can they be provided, to  individuals or entities accessing information from any state where SFA  has not made proper filings.  Therefore this website is not an offer or  solicitation for investment advisory services or other products or  services in any jurisdiction where we are not authorized to do business  or where such offer or solicitation would be contrary to the securities  laws or other local laws and regulations of that jurisdiction. 

 Our philosophy has not changed for 38 years – we buy businesses, not  stock. We look for long-term fundamentals that outweigh short-term  worries on the Street. We have long-term horizons and enormous patience.  We look for companies trading at a discount to free cash flow, book  value and earnings. We have a basic fundamental belief that all  undervaluation will eventually correct. As our criteria for investment,  we look for strong franchises that have the freedom to price, strong  experienced management that is owner-oriented, and businesses trading  within 30% of tangible book value, with 10% return on equity for every  dollar of book value purchased. 

As an example, if a company is trading at 2 times book, we are  looking for a 20% return on equity. We look for an earnings growth rate  for the past three years that, projected forward, is in excess of  the current price to earnings ratio, that is known as the PEG. We look  for intrinsic value yield, essentially distributable free cash flow to  market price, that is at least 400 basis points greater than the  10-year Treasury rate. As an example, if a company has a market value of  $1 billion, we expect distributable free cash flow of at least $70  million. We look for a current ratio, that’s current assets divided  by current liabilities, of at least 2, and for a quick ratio, that’s  current assets minus inventory divided by current liabilities, of at  least 1. We like enough cash in working capital to cover payables and  long-term debt that is less than 50% of net worth. Most important, we  look for companies that have a stated mission to generate shareholder  value. That means expansion that is accretive to earnings,  dividend increases and share buybacks.

 As a final filter, we like to see our companies trading above their  10-month and 200-day moving averages. Our dream investments are  companies that trade for less than net working capital – that’s current  assets minus current liabilities minus long-term debt – and that have  operating cash flow.