The Olstein Process

The Olstein process emphasizes investments in undervalued equity securities of companies with discernible financial strength, unique business fundamentals, competitive edge and ability to generate free cash flow.


Our analysis focuses on how a company’s operations generate sustainable free cash flow, how much of that cash is available to investors and the level of ongoing investment required to maintain and grow free cash flow.

We believe that reliable valuations require determining if a company’s accounting policies reflect business reality (assessing a company’s quality of earnings), accounting adjustments to reported numbers to eliminate management bias, and identifying positive or negative factors that may affect future free cash flow.

Investment Process: Screening, Analysis & Stock Selection

  • Determine focus list
    of investment ideas
    for further reading
  • Conduct initial
    analysis of focus
    list companies
  • Conduct intensive
    forensic analysis of
    attractive candidiates
  • Determine private
    market value

Olstein Capital Management believes:

  • There is a strong correlation between above-average investment performance and error avoidance.
  • A company’s stock price often falls below its private market value due to temporary problems such as missed earnings estimates, overreaction to short-term results or overall negative market psychology. These short-term deviations may present viable opportunities for the patient, long-term investor.
  • Excess cash flow is the lifeblood of a business and is the primary determinant of a company’s private market value.
  • Forensic analysis of fnancial statements reveals the quality of a company’s earnings, the success of its strategy, sustainability of its performance and impact of management decisions on future cash flow.

Discipline and Patience

The Olstein Funds are suitable for investors with a longer-term investment outlook of three to fve years. Olstein’s accounting-driven, value-oriented approach requires discipline – the discipline to follow your convictions when faced with the negative market psychology that usually surrounds undervalued companies – and patience – as the negative psychology and misperceptions about a company slowly change. Olstein’s investment approach is designed for investors who have the patience to remain invested through market cycles and periods of price volatility.

About Risk

A mutual fund is not intended to be a complete investment program and may not achieve its described goals. All mutual funds have risk and you can lose money by investing in mutual funds. Investment return and principal value of an investment will fluctuate with market conditions so that when redeeming, an investor’s shares may be worth more or less than the original amount invested.

How do we assess the Quality of Earnings?

We assess the quality of a company’s earnings by answering three important questions. Ask Us
LEGAL DISCLOSURES AND OTHER IMPORTANT INFORMATION

The fund recently experienced significant negative short-term performance due to market volatility associated with the COVID-19 pandemic.

Investing involves risk including possible loss of principal.  Investors should carefully consider the investment objectives, risks, charges and expenses of the Olstein Funds.  This and other important information is contained in the prospectus, which should be read carefully before investing.  For a copy, click the prospectus link below.  

Past performance is no guarantee of future results. This information is not an offer to sell or a solicitation to buy any security, nor shall any security be offered or sold to any person, in any jurisdiction in which such offer, solicitation, purchase, or sale may not lawfully be made. Important legal information – please read the disclaimer before proceeding. Be sure to read the Olstein Funds Privacy Policy before becoming a shareholder. Click here to read the disclaimer+