January 25, 2008
With all the gloom and doom on Wall Street, and the Feds trying to get an economic stimulus package passed as soon as possible, what’s an investor to do? Portfolio Managers Lou Holtz and Yossi Lispker of Engemann Asset Management, an investment firm specializing in small and micro cap stocks, have an idea:
Mr. Lipsker: I think there’s opportunity. There’s always opportunity in the market. If something goes wrong in one area that just means that it opens up an opportunity somewhere else. Our goal is to go out and find opportunities to make positive returns for our clients.
Here’s a few of Lipsker and Holtz opportunities for 2008:
- LKQ Corp. (LKQX)- ”This company is a dominant provider of salvaged parts and recycled parts for the automotive market… LKQ has done a good job of buying up smaller shops and putting together a national network for what had been a very fragmented market. There is a major benefit to the new, larger size. Due to their broad reach, they are able to identify the parts they need and thus are smarter buyers of parts. This leads to better inventory turnover, which is a key component of return on invested capital in this industry.”
- Cogent Communications (CCOI) – “They’re a provider of broadband Internet service to enterprises. They have one major key advantage and it’s called price. They are the cheapest provider out there by about 70%, something like $10 per megabit is their price, I think, and I don’t know that you can get anything for less than $15 or $20 from some of the big providers like Verizon (VZ) and AT&T (T).”
- Ramtron (RMTR)- It’s been in business since the 1980s and it’s the biggest provider of what’s called FRAM memory. FRAM memory is an alternative to other memory providers such as Flash and what’s called EEPROM. It’s a non-volatile semiconductor memory, which means you can write and rewrite to the semiconductor chip and it can save the data even when the power is off on the device. Ramtron’s customers include the metering and automobile industries where there is a need for semiconductor chips that can take in data and store it even when the power is turned off…there are not really any competitors to Ramtron in the FRAM space. In its little niche area of the world, it dominates what it does and we like that fact.”
For the full interview with Mr. Holtz and Mr. Lipsker, including a complete overview of their investment process, from buy to sell, and more stock picks, click here.
