Sudhir Nanda is a Portfolio Manager and the head of the Quantitative Equity Group for T. Rowe Price. He is President of the Investment Advisory Committees of the QM US Small-Cap Growth Equity, QM US Value Equity, QM US Small- and Mid-Cap Core Equity, and QM Global Equity Strategies.
He is a vice president and member of the Investment Advisory Committees for the Capital Appreciation, Diversified Mid-Cap Growth and Institutional Global Value Equity Strategies. In addition, he is a member of the U.S. Equity Steering Committee.
Dr. Nanda is a vice president of T. Rowe Price Group, Inc. He received a B.A. degree from St. Stephen’s College, Delhi; an MBA from Indian Institute of Management, Calcutta; and a Ph.D. from the University of Massachusetts.
In this 4,199 word interview, Dr. Nanda details his portfolio management philosophy and how it leads to his top picks.
“The process behind this is a very systematic process for picking stocks. Some people call it quantitative. I would call it systematic fundamental because all the metrics that are going into stock selection are fundamental metrics like price/earnings multiple, free cash flow yield, capex, return on equity. But it’s implemented in a very systematic manner.”
I can describe what exactly goes into deciding how to buy a stock. The most important characteristic we look for in a stock is its valuation. And we are doing two comparisons. One is comparing a stock’s valuation with its sector or industry, and the second is comparing it with all small-cap growth stocks. And within valuation, we pay more emphasis on cash flow metrics like free cash flow yield rather than on price to earnings or price to book multiples.”
One interesting pick in these volatile times is a health care drug trial company:
“I will highlight another health care company we own. It’s a company called PRA Health Sciences (NASDAQ:PRAH). And what PRA Health Sciences does is, it’s a contract research organization.
It’s got a global footprint. And really what a contract research organization is, if you’re a drug company and you’re testing a drug for trial, you do different phases of trials. A lot of the testing mechanics are contracted out or outsourced to these contract research organizations, and PRA Health Sciences is one of them.”
Get the complete details on this company, and many others like it by reading the entire 4,199 word interview with Dr. Nanda, exclusively in the Wall Street Transcript.
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