Joshua Honeycutt is a Partner at Mar Vista Investment Partners. He has 20 years of investment experience. He is a portfolio manager/analyst and is a member of the investment team.
Before joining Mar Vista Investment Partners in January 2009, he spent seven years as an analyst at Roxbury Capital Management with a special emphasis in covering consumer discretionary and retail stocks.
Mr. Honeycutt was also an analyst with Harvey & Company, covering mergers and acquisitions, and an associate in forensic accounting at Tucker Alan.
Jeffrey Prestine is a Partner at Mar Vista Investment Partners. He has 21 years of investment experience. He is a portfolio manager/analyst and is a member of the investment team.
Before joining Mar Vista Investment Partners in January 2009, he was an analyst covering technology and energy stocks at Roxbury Capital Management. Mr. Prestine joined Roxbury from Seneca Capital Management, where he was a technology and energy analyst for more than five years.
He began his career in finance at Prudential Securities as an associate analyst covering enterprise software companies.
In this 2,913 word interview, exclusively in the Wall Street Transcript, these two investment professionals reveal the current top stocks in their portfolio.
“…The firm currently manages around $5 billion in assets under advisement across our three strategies. The client base is a mix of endowments, foundations, public and private pension funds, and high net worth individuals.
We provide our clients a variety of investment vehicles, including separately managed accounts, subadvised portfolios, unified managed accounts — UMA — as well as a global comingled investment trust.
In terms of structure, the four members of our investment team, along with our Chief Operating Officer, own 100% of Mar Vista. As you probably know, a common attribute of successful multigenerational investment firms is equity ownership by the investment team.
For us, this incentive structure better aligns our decision-making with the objectives of our investors. Having our entire compensation based on the value we create for our clients is critical to the culture of the firm, the consistency of the team and the long-term alpha generation of our products.
TWST: And when you look at what to include in the portfolio, are there any overarching investment philosophies?
Mr. Prestine: Yes, absolutely.
Mar Vista invests exclusively in wide-moat businesses that compound free cash flow, possess the opportunity to produce high returns on invested capital and trade at a discount to our estimate of their intrinsic value.”
Some examples from the Mar Vista portfolio include:
“The first one to talk about is Adidas (OTCMKTS:ADDYY). This is a business that owns a 70-year-old global portfolio of branded, innovative athletic products. The company has built its economic moat around their iconic brands and tremendous scale.
As one of only two athletic brands with direct-to-consumer capabilities, referred to as DTC, Adidas is well-positioned to increase its competitive advantages in an evolving consumer marketplace. These DTC initiatives really capture an increasing portion of the retail value chain by creating direct connections with consumers. With direct selling, Adidas eliminates the middleman from the industry profit pool and earns higher returns on invested capital.
These types of business model transitions require strategic vision and sound execution. We think Adidas’ CEO, Kasper Rorsted, possesses both of those requirements. Adidas was successful in attracting Rorsted away from his successful tenure at Henkel (OTCMKTS:HENKY) years ago. Under his leadership, Adidas’ global supply chain and its underperforming U.S. business has been transformed.
Adidas is roughly one-third the size of Nike’s (NYSE:NKE) U.S. business. Therefore, there’s meaningful market share and profit opportunity in the world’s largest consumer market. We think as Adidas continues to gain U.S. market share, the company’s operating margins and cash flows will converge with those of industry-leader Nike.
We expect our investment returns in Adidas to shadow the company’s long-term business opportunity and 13% to 15% intrinsic value growth. ”
Get the complete analysis of Adidas vs. Nike as a portfolio investment by reading the entire 2,913 word interview, exclusively in the Wall Street Transcript
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