How EP Wealth Buys Stocks


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EP Wealth Advisors

A Conversation with EP Wealth Advisors Director of Portfolio Strategy - Adam Phillips, CFA®, CFP®

Often quoted in major national media, Adam is a Chartered Financial Analyst (CFA®), a CERTIFIED FINANCIAL PLANNER™ (CFP®), and has been included on the Forbes Next Gen Best-in-State Wealth Advisors 2019 list. He is a member of the CFA Society of Los Angeles and the CFA Institute. Adam helps establish asset allocation strategy as a member of the EP Wealth Investment Committee, which supports all EP Wealth Advisors and their clients. The Committee’s top-down approach to portfolio construction begins with an outlook on the economy’s likely direction, followed by the implications for different economic sectors and asset classes. This culminates in strategic selection of the individual stocks, bonds, mutual funds or other investments deemed most appropriate for each individual client’s portfolio.

We Look at Several Key Criteria When Buying Stocks

EP Wealth Advisors’ process of selecting equities for client portfolios demonstrates which factors to consider when buying a stock. For them, it starts at the investment-team level. Each team member is assigned various areas of coverage—for example, consumer discretionary, real estate companies or financial companies. As we evaluate companies as potential stock purchases, we consider a number of factors including: 

What is the Valuation?

EP Wealth performs its own independent valuation of a stock to check if valuations are too lofty. The price of a security may differ from the intrinsic value of that security.

Is the Earnings Trend Positive? 

It’s also key to comprehensively asses earnings capabilities--that the stock of the company being considered is making money and those earnings are growing to justify the company’s valuation.

Is There a Long-Term Catalyst?

Finally, we check for a catalyst that can support a company's long-term growth. When considering a company looking to expand its offerings, check to see if it is doing so successfully because a company successfully expanding its offerings could serve as a long-term catalyst for growth. 

Our Top-Down Investment Approach

We evaluate the outlook for underlying industries within a sector. For example, not all financial companies are considered equal (you can use any sector as an example): in adding exposure to the sector, we must determine whether we want to focus on a major bank, regional bank or an insurance company. 

Tools to Empower Stock Pickers 

EP Wealth subscribes to a variety of information sources, including a quantitative research provider. Advisors can screen for factors such as earnings momentum, management quality, price momentum and valuations. Stocks are ranked with a letter grade: A, B, C, D, or F. This can narrow down the qualifying firms. Then we can drill down further into qualitative business characteristics, such as the presence of a catalyst, to select securities we’d like to add to our client portfolios.

How Can You Benefit from a Strategic Approach to Investing? 

With a staff of professionals and access to analytical tools, EP Wealth offers a comprehensive range of services to help you invest with greater insight, as well as develop a holistic wealth management strategy. To discuss your finances and investment goals, we invite you to contact one of our advisors

This is #8 in the Informed Investor “How to Build Your Investment Portfolio” series. Other topics include Asset Allocation, Why We Diversify, How to Buy a Bond, The Types of Investment Risk, Concentrated Positions, etc. For more information on our investment process, check out our investment management page or ask for a Portfolio Review.



  • EP Wealth Advisors (“EPWA”) makes no representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information presented in this report. EPWA has used its best efforts to verify the data referenced. The information presented was obtained from sources deemed to be reliable. However, EPWA cannot guarantee the accuracy or completeness of the information offered. All expressions of opinion are of the presenter and are subject to change without notice.
  • Past performance is not be indicative of future results. Therefore, no current or prospective client should assume that the future performance of any specific investment or strategy, or product made reference to directly or indirectly, will be profitable or equal to past performance levels. Future financial conditions and events can never be accurately predicted. No analysis, plan, or report has the ability to accurately predict the future.
  • Information presented is general in nature and should not be viewed as a comprehensive analysis of the topics discussed. It is intended to serve as a tool containing general information that should assist you in the development of subsequent discussions with the appropriate professional(s). Content does not involve the rendering of personalized investment advice nor is it intended to supplement professional individualized advice. Always consult a professional Financial Advisor before implementing or applying any of the approaches or strategies made referenced to directly or indirectly here.
  • Any direct or indirect references to investment allocation, specific securities, security sectors, or any investment vehicle(s) should not be taken as a recommendation or solicitation to buy or sell a particular security or invest in any specific investment strategy. There is no guarantee that any of the information or investment strategies discussed will be suitable or profitable.
  • Asset allocation and diversification do not assure or guarantee better performance and cannot eliminate the risk of investment losses. There can be no assurances that a portfolio will match or exceed any particular benchmark.
  • Hiring a qualified advisor and/or diversifying your portfolio do not guarantee investment success, and does not ensure that a client or prospective client will experience a higher level of performance or results. No guaranty or warranty is made that any results, projections, or other information being represented in this presentation will be met or sustained.
  • All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals, and economic conditions, may materially alter the performance of your portfolio. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for a client's portfolio. There is also no assurance that a portfolio will match or outperform any particular benchmark.
  • EP Wealth Advisors, LLC is a registered investment adviser with the U.S. Securities and Exchange Commission (“SEC”). Registration with the SEC does not constitute an endorsement by the SEC, nor does it imply that EP Wealth Advisors Inc. has attained a certain level of skill or ability.
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