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Five money managers examine portfolio management strategies in the latest Issue of The Wall Street Transcript available at (212/952-7433) or www.twst.com/info604.htm

TWST: Can you give us a brief overview of Steinberg Global Asset Management?

Mr. Mayer: Steinberg Global Asset Management recently celebrated its 10-year anniversary. We manage in excess of 250 million for a variety of clients. We maintain offices in Boston and in Boca Raton. We employ six portfolio managers and a full support staff.

TWST: Can you explain the investment decision-making process?

Mr. Mayer: I’m new to Steinberg Global. I’ve been with the firm for about four months. Rich Steinberg invited me to become part of Steinberg Global’s team to expand the firm’s analytical capabilities and add more depth to the process. What I really want to talk about are the three key style approaches, and how we have begun utilizing them in the investment process at Steinberg Global. The three core styles are called Earnings Momentum, Value Momentum and GARP Momentum. Each style targets specific areas of the market. The first style I focus on is Value Momentum. Of course, recently, value has been very much in favor. My value style is very simple in approach. I basically look for stocks with low price to sales ratios. The second strategy that I employ is a GARP strategy. I look for PEG ratios of less than 1. The companies must also have high one-month and one-week relative strengths. The final strategy is an earnings growth model, or Growth Momentum. Here, I’m really looking for high one-year sales and earnings growth, as well as high profit margin and high return on equity, and also the high relative strength of the stock. Several stocks recently qualify in that regard. One is Coca-Cola (KO), and the other is Anheuser-Busch (BUD). Consumer-oriented companies and steady earners are what we favor over the long term. Another name on the value side is NIKE (NYSE:NKE)— staying with the same theme of looking for companies that have international exposure and the ability to boost earnings from the decline in the dollar. NIKE just released their earnings expectations and numbers. Their earnings per share were up about 28%. The company is extremely profitable. It has a return on equity of about 17%. One of the positive issues with NIKE is that their inventory levels at the department stores, the wholesale level and the specialty stores are at very low levels. So there’s not a lot of stock on the shelf. As the summer wears on and children go back to school, I think there should be a good back-to-school rush for their products. Another area that I think can add incremental value to the company is that they’ve continued to expand into the clothing and apparel markets. Earlier this year, NIKE purchased Hurley International. It gave them access to the active lifestyle apparel market, which should increase their brand awareness among the youth-oriented market. It’s no longer just a shoe company! Also, Kobe Bryant, the professional basketball player, has just finished his contract with adidas (ADDDY). So there is the opportunity for NIKE to try to pick up another star other than Michael Jordan to put on their roster and feature with specialty shoes. NIKE also has a large portion of its overall earnings coming from overseas. Again, they should be helped with the currency translation. We expect that the profit margins will start significantly increasing sometime next year.

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