Chesapeake Mutual Funds

We seek investments with the following characteristics:

Earnings Growth

• Typically Earnings per share growth of 15% or better
• Earnings Growth derived from a positive change in fundamentals

Valuation Disconnect

• Focus on companies whose valuation in our opinion is not yet reflective of quality or magnitude of growth rate
• Discipline may help to mitigate risk

Catalyst

• Driver of change typically a function of internal factors
• Focused on growth drivers that may be misperceived or not yet understood by Wall Street

Balance sheet strength

• Research leads to companies with strong balance sheets
• Low debt/capital, along with strong asset quality and cash flow allow companies to be in control of their operations and growth opportunities

Insulated macroeconomic risk

• Seek growth that is primarily determined by internal changes vs less-predictable macroeconomic conditions
• Avoid investing where factors such as fluctuations in commodity prices, currency exchange rates, and interest rates greatly inhibit earnings predictability