At Robotti we are research focused. We are not driven by fads or trends. As long-term value investors, we look for situations where the market price of the security is well below the intrinsic value of the security. We utilize a bottoms-up research methodology that enables us in finding companies that attract little attention from the Wall Street community or have fallen out of favor. In short, we try to buy a dollar of value for only fifty cents. Buying securities at these discounts provides us with the potential of realizing significant appreciation while simultaneously providing a "margin of safety" against adverse developments.

Here are some of the categories that regularly provide us with interesting opportunities:

• Special Situations - Liquidations, spin-offs, bankruptcies, preferred issues and rights offerings are areas of particular interest to our firm, and often present excellent risk-reward opportunities. These special situations are often less attractive to the typical investor for reasons unrelated to the company's intrinsic value. Because special situations are generally not followed by conventional Wall Street research houses, they often present an opportunity for value-oriented investors willing to look off the beaten track.

• “Net Net” Working Capital - The minimum liquidation value of a corporation is, in most cases, its “net net” working capital. This value is determined by subtracting from current assets all liabilities ranking senior to the common stock. From time to time, the market will value companies below this level. Under these conditions, a buyer is acquiring the company's fixed assets at no cost, and paying nothing for the business as a going concern.

• "Fallen Angels" & "Orphans" - "Fallen Angels" are companies that once were the favorites of Wall Street but have at one point disappointed investors enough to cause their stock prices to decline to irrationally low levels. If the company's balance sheet is strong enough to withstand a difficult period and the fundamentals of the business are sound, the shares may represent an exceptional value. So called "Orphans" are companies that have rapidly lost popularity after an initial public offering. Because of their short and disappointing history, and the lack of strong investor interest in these situations, contrarian investors can often find value among them. 

Where You Won't Find Us Investing
Every few years an industry emerges that promises uninterrupted growth. We do not attempt to research companies in industries that require specific knowledge of a rapidly changing, technology-driven environment. We believe these types of companies are widely monitored by Wall Street, and therefore unlikely to provide significantly undervalued opportunities.