Hilliard Lyons AQA Account

Hilliard Lyons Automated Quantitative Analysis (AQA®) Strategy Separately Managed Account

Quantitative analysis provides a common language for comparing companies. In the long run, investors value companies whose operating histories show that they are well run. But picking the right variables that might reveal under-valued companies can be challenging. So Hilliard Lyons developed Automated Quantitative Analysis (AQA), which provides a rigorous process to evaluate undervalued companies.

AQA is an automated quantitative analytical tool that calculates the value of individual companies and compares these measures of value with current stock prices. Discrepancy between this calculated value and the current stock price determines the relative under- or over-valuation of each stock. Focusing on a company’s past financial performance, AQA analyzes fundamental ratios and trends of the most recent eight-year history of each company in its universe, excluding estimates of future balance sheet and income statement performance. The analysis is purely quantitative, and ignores qualitative information such as company-specific material news and events. Stocks are ranked from the most undervalued to the most overvalued based on the difference between their calculated current values and current market prices.

The AQA Strategy – Available Only at Hilliard Lyons

Using the AQA methodology, portfolio managers Alan Morel and Cory Gerkin now offer investors an actively managed portfolio of stocks that includes a selection of undervalued companies from the S&P Small-, Mid-, and Large-Cap Indices (excluding bank stocks, REITS, and insurance companies). An undervalued stock is one selling at a price below its intrinsic value. AQA methodology results are then ranked, and only the most undervalued stocks, as defined by AQA, are included in the portfolio.

Contact your Wealth Advisor for more details.


AQA identifies stocks based on companies’ past performance, which does not guarantee future results. Investing in securities involves risks including possible loss of principal.

Hilliard Lyons AQA Strategy is for clients who seek an actively managed, quantitative strategy designed to identify undervalued companies for long-term growth, and can be accessed through Hilliard Lyons’ Consulting Services Group in the form of a separately managed account.

AQA Description:

  • A disciplined process for ranking and managing investment choices.
  • A dispassionate approach for making buy and sell decisions.
  • Direct ownership insecurities, invested across S&P Small-, Mid-and Large-cap securities and ability to place restrictions for portfolio customization.*
  • A portfolio of individual stocks that provides potential for long-term growth of capital.

Automated Quantitative Analysis Investment Objective:

To seek to outperform the broad U.S. domestic equity market indexes by buying and owning companies we calculate to be undervalued by the market, awaiting recognition of value in the marketplace.

Investment Philosophy:

We believe investors need two pieces of information to make any investment decision: Value and Price.

  • For publicly traded U.S. operating corporations, value can be derived from publicly available data.
  • Price is easily determined while the market is open. Stocks spend most of their time being overvalued or undervalued.
  • Within AQA, it takes approximately 33 months for a stock to move from undervalued to fairly valued.

Developing a disciplined, repeatable process for selecting and evaluating stocks is difficult and time-consuming for most clients. Fortunately, at Hilliard Lyons, we developed an exclusive strategy1 (AQA®) for evaluating companies in the S&P Small-, Mid- and Large-Cap Indices. You can now invest based on AQA through a separately managed account (SMA).

Please review the Hilliard Lyons Form ADV for more information before making an investment decision. The form ADV provides information about this strategy and other Hilliard Lyons advisory programs.

*The portfolio manager reserves the right to reject restrictions. Restrictions will affect performance.

1 We also advise on investment company products sponsored by First Trust Advisors, LP, based on the AQA methodology.

2 Subject to change at any time.

Securities and advisory services offered through J.J.B. Hilliard, W.L. Lyons, LLC, a registered investment advisor and broker dealer. Investing in securities involves risk, including possible loss of principal. ©2018. All rights reserved.


J.J.B. Hilliard, W.L. Lyons, LLC | Member NYSE, FINRA, & SIPC

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