Polaris Capital Management, founded in 1995, is an international value equity investment firm. It recently reported that it manages over $4 billion from a diversified client base. Polaris’s manager, Bernard Horn, formerly worked at MDT Advisers and holds a master’s degree in management from MIT’s Sloan School.

Because of its global nature, Polaris Capital has a particularly wide universe of stocks to invest in. Bernard Horn and his team like to narrow down the colossal number of publicly traded companies by using proprietary screening techniques to identify which ones have an attractive level of discretionary cash flow- cash flow from operations less maintenance capital expenditures- in relation to their market value. Polaris Capital is a believer in the “margin of safety” argument for value investing, namely that avoiding large downside risk can be a driver of above-average returns, and companies trading at a low multiple of this discretionary cash flow figure will be similarly safe to those with low P/E or EV/EBITDA multiples. Beyond that point Polaris Capital’s analysis becomes more qualitative, analyzing the company’s position as well as its financials.