Steven Bleiberg is Managing Director and Portfolio Manager at Epoch Investment Partners, Inc. He is involved with the design and development of investment strategies and is a contributor to Epoch’s thought leadership.
Earlier, he was a portfolio manager at Legg Mason responsible for managing $7.5 billion in various asset allocation-based funds including Target Risk, Target Date and Dynamic Risk Management.
Prior to that, he was the head of investment strategy at Citigroup Asset Management and a portfolio manager at Credit Suisse Asset Management.
He is a co-author of Winning at Active Management: The Essential Roles of Culture, Philosophy and Technology. He received a bachelor’s degree from Harvard and a master’s degree from the Sloan School of Management at MIT, with a concentration in finance.
In this 3,678 word interview, exclusively with the Wall Street Transcript, Mr. Bleiberg reveals many of his top picks and the investment philosophy that determines them.
“…If you were going to go out and buy a business yourself to own 100% of it, how would you focus on it, or how would you make that decision, first, whether to do it and, second, how much to spend?
You would not look at what the accounting earnings are going to look like each year for the next 10 years. What you would want to know is: How much cash is it going to cost me out of pocket today to buy this business, and how much cash is going to flow into my pocket each year going forward?
That’s how you would analyze it. And to us, buying stocks, even though you’re not going to be buying the whole company, that’s still the right way to think about it because you’re trying to figure out what is this business worth to me as an owner.”
This leads Mr. Bleiberg to focus his stock picks on several high return strategies:
“So with the strategy, which we call Capital Reinvestment, we might like a company such as Visa (NYSE:V) or Mastercard (NYSE:MA) because they have very high margins.
If you think about their marginal cost — if I go to the store, and I charge something on my Visa card, they collect their fee as a percentage of what I spent at the store. But their marginal cost for processing that transaction is extremely low. I mean, this is all automated.
And so it’s a very high-margin business. So that’s what drives the high return on invested capital there.”
Get all the most important picks from Epoch Investment Partners by reading the entire 3,678 word interview, exclusively with the Wall Street Transcript.
In this excerpt from the complete 2,755 word interview with Dr. Kumaraguru Raja, he introduces two companies that are developing treatments for significant high profile infectious diseases:
Dr. Raja: Yes, it is interesting that you bring that up because the two companies I cover in the infectious disease space are SCYNEXIS (NASDAQ:SCYX) and Vaxart (NASDAQ:VXRT). SCYNEXIS is an antifungal company that is developing drugs for vulvovaginal candidiasis, and the other company I cover is Vaxart.
Vaxart’s focus has been to develop vaccines that can be taken orally compared to the vaccines right now in the market, like for example, the flu vaccine right now, you need to take an injection. So Vaxart is developing vaccines for flu as well as norovirus that can be taken orally.
They have recently announced that they are also developing a vaccine for coronavirus. I think as the coronavirus is in focus, people are paying a lot more attention to the innovation that is happening in the health care space. I think some of the companies have performed very well, especially the companies that are developing drugs targeting coronavirus, but overall, it also shows the importance with regard to the therapeutics that are being developed for various diseases where there is a significant unmet need.
TWST: If a company has something promising to specifically treat the coronavirus, are there any approaches it should take as it works with the FDA? There is certainly a lot of attention that might distract people or make it more difficult to come up with something under more pressure.
Dr. Raja: The focus has been on coronavirus especially because we have seen this happening over the past couple of months. The companies that are developing the drugs, they are in the early stages of development. Some of them are rushing to develop the drugs, but I think especially Vaxart has a different profile because, as I said, they are developing vaccines for various infectious diseases that can be taken as an oral formulation.
The advantage with oral formulation is that they also provide mucosal immune response, which is through the gastrointestinal tract and the respiratory tract. This is very important because coronavirus is primarily an infection of the respiratory tract. And I think this kind of differentiated approach will help in terms of developing vaccines for these diseases.
TWST: Of the companies you cover, have there been any concerns, as far as coronavirus, about the supply chain getting impacted or manufacturing impacted if it involves China?
Dr. Raja: Not in terms of the coverage universe I have. Most of the companies I cover do not even have commercial drug launches as yet. And most of the manufacturing is being done in the U.S. for these companies. But in terms of raw materials, we do not know yet how this is going to impact. There has been no impact as of now, and the companies have not provided guidance on any impact so far.
Read the entire 2,755 word interview, exclusively in the Wall Street Transcript, to get the complete picture from Dr. Raja.
Dr. Kumaraguru Raja is a Senior Biotech Analyst at Brookline Capital Markets. Previously, he was Vice President, Biotechnology Research at Noble Life Science Partners.
He started his equity research career in 2010 as a Senior Associate Analyst on the Citi Research biotechnology team. His expertise includes bottom-up scientific and financial analysis on companies across therapeutic areas and across a spectrum of market capitalizations.
He focuses on drug development, intellectual property, FDA and EMA regulations, reimbursement coverage and clinical science. He conducted postdoctoral research at Mayo Clinic on the epigenetic causes of cancer and at Los Angeles Biomedical Research Institute on the molecular mechanisms concerning the role of human bone marrow stem cells in normal and leukemic hematopoiesis.
He received a doctoral degree from Bowling Green State University and an MBA from University of California, San Diego.
In this 2,755 word interview, exclusively in the Wall Street Transcript, Dr. Raja reviews microcap biotech stocks for the ones that will survive and thrive, and therefore create multiple return opportunities for investors.
“One of the companies would be Atreca (NASDAQ:BCEL). This is a company that went public last year. What this company is doing is it samples the blood from cancer patients who respond to treatments, and then, they sequence the B cells of these patients to find antibodies that are specifically expressed in these patients.
And then, they try to see whether these antibodies are able to bind to the cancer tissue from other patients.
So they are trying to screen the immune system of cancer patients who respond to treatments to find new treatments, which will respond across different cancers.
They already have a candidate in the clinic. They are undergoing Phase I clinical trials this year. We will have more data from this company by the end of this year.”
“Another company would be Medicenna (OTCMKTS:MDNAF). This is a company that is focusing on leveraging cytokines to target cancers. They have a drug that targets IL-4. So IL-4 is a cytokine. The IL-4 receptor is expressed in a lot of brain cancers.
What Medicenna is doing is they have a drug that is conjugated to IL-4. This drug specifically binds to the cancer cells, which express the IL-4 receptor. And then, it introduces a toxin into these cancer cells so that only the cancer cells are killed. They have promising Phase II data. And this drug is expected to enter pivotal Phase III trials this year.
They also have a huge platform with a focus on cytokines. They also have an IL-2, which is in focus because Synthorx got acquired earlier. So they also have an IL-2, which is being developed. The focus is to increase the efficacy of the checkpoint inhibitor.”
Read the entire 2,755 word interview and get the many other top tier return opportunities identified by Dr. Kumaraguru Raja is a Senior Biotech Analyst at Brookline Capital Markets, exclusively in the Wall Street Transcript.
Jacob Johnson, CFA, is a Research Analyst at Stephens Inc. He is on the health care team following the life science tools and diagnostics space. In this 4,742 word interview, exclusively with the Wall Street Transcript, Mr. Johnson applies his research skills to a newly hot sector:
“…We’ve tried to dive into some of the themes we’re seeing in the space. And we’ve addressed three big ones that maybe we can run through: one, biologics and the bioprocessing space; two, the role of outsource manufacturing for pharma and pharma services; and then three, probably the most important growth driver for our current coverage, cell and gene therapy. Investors want exposure to these themes.”
Mr. Johnson neatly identifies the publicly traded companies that provide the equipment for the development of new drug therapies in the United States:
“Moving to the next theme, and I think probably the most compelling, is cell and gene therapy. And these are, in a sense, a biologic, but they’re growing so rapidly, and it’s such a large market, really can kind of consider them on their own.
And the excitement here is because cell and gene therapies have the potential to revolutionize cancer treatment and cure some debilitating and deadly diseases. There’s a significant amount of activity in the pipeline with 1,000-plus clinical trials associated with regenerative medicine but only about four commercially approved therapies in the U.S.
And so the outlook for growth and spending for these therapies is fairly significant. From a life science tools perspective, these therapies pose a number of logistical challenges as they require the collection, preservation, transportation and manipulation of human cells. That creates opportunities for a number of companies. And maybe we can hit on some of these, but that would include BioLife Solutions (NASDAQ:BLFS), Brooks Automation (NASDAQ:BRKS), Catalent (NYSE:CTLT), Cryoport (NASDAQ:CYRX), Repligen (NASDAQ:RGEN) and Bio-Techne (NASDAQ:TECH).
And we think the cell and gene therapy end market is really probably the most important growth driver for these names in our coverage list for the next one, three, five, 10 years. As I said earlier, these therapies use a person’s own cells or modified genes to allow a patient’s body to either fight a disease or alter defective cells.”
Get complete detail on these and many other drug development stocks, only in this 4,742 word interview, exclusively with the Wall Street Transcript.
Vincent Costa, CFA, is Manager of Global Quantitative Equities at Voya Investment Management. He is also a portfolio manager for the active quantitative and fundamental large-cap value strategies. He joined Voya Investment Management in 2006 as head of portfolio management for quantitative equity.
Peg DiOrio, CFA, is the Head of Quantitative Equity Portfolio Management at Voya Investment Management. She is also a portfolio manager for the active quantitative strategies. Earlier, she worked at Alliance Bernstein/Sanford C. Bernstein. She received an M.S. degree in applied mathematics, statistics and operations research from New York University.
In this 2,566 word interview, exclusive to the Wall Street Transcript, these two portfolio managers give an insightful analysis of their investment philosophies.
“The equity organization has about $50 billion in assets under management, of which roughly about $20 billion of that is in what we would call quantitative equities…We do both fundamental and quantitative investing on the equity front…
Fundamental equity strategies typically are built to outperform, on a relative basis, benchmarks by doing fundamental analysis on securities and companies and then building portfolios that are designed to outperform a given benchmark.
On the quantitative side, quantitative strategies are built to also outperform underlying benchmarks but do so using stock selection models, rather than individual security analysis. Those models will be used to decide which stocks we want to overweight or underweight in a given portfolio.”
Mr. Costa describes it this way:
“I think when building a quantitative portfolio, there’s a lot of the human element that goes into the design of the process that you build.
And so we’ve been fortunate here at Voya to have a strong fundamental equity team with us. The quant team kind of evolved out of our fundamental team, so we spend a lot of time upfront with our analysts when we’re building our stock selection models to understand what works and what doesn’t work in each of the sectors, and then in using those, the model that we build in portfolios, we do spend a lot of time also upfront, making sure we’ve got the right constraints in place so that, as Peg mentioned, we’re not going to be tilting toward one sector versus another.”
Get the rest of this 2,566 word interview in detail by reading it exclusively in the Wall Street Transcript.
Todd Griesbach is a Partner and Portfolio Manager at RMB Capital Management LLC. When he joined RMB Capital in 2011, he brought 13 years of experience in analyzing equity securities and managing portfolios for mutual funds, institutions and separately managed accounts.
Prior to RMB, Mr. Griesbach worked as an equity analyst in Chicago for Columbia Wanger Asset Management and Ariel Investments. While rooted in value investing, his investment philosophy has developed and grown over the years to more fully encompass a “growth at a reasonable price” style.
In this 3,316 word interview, exclusively found in the Wall Street Transcript, Mr. Griesbach reviews his portfolio construction formulas and reveals some investing insights for this market.
“The firm was formed back in 2005 by Richard M. Burridge, hence where the name of the company comes from, and it was formed as a wealth management firm. That’s really our core business: to provide good long-term advice to high net worth individuals, small foundations and other relationships.
And it’s always emanated from Dick Burridge’s personal investment philosophy in terms of how we build portfolios and how we manage money for clients, and that is very long-term-oriented, based on really high-quality investment strategies, with an idea of compounding our clients’ capital over a very long period of time. ”
“Dividend Growth has a very similar philosophy with the biggest difference being it invests in more mature companies that also grow their dividends over time, whereas Core Equity is more faster-growing companies that don’t necessarily have that dividend stream as part of their return component.”
“A good example from Dividend Growth would be American Tower (NYSE:AMT), which is one of our largest positions. American Tower owns the cell towers that all the telecom carriers put their equipment on to run their networks.
It’s technically organized as a REIT, real estate investment trust. It’s a great business model because each one of the carriers has realized that it just doesn’t make economic sense for them to actually go out there and build towers for themselves and put their equipment on the network, whereas if someone independently owns the towers, they can put multiple carriers’ equipment on the network and really create more attractive economics and a better return on invested capital.”
Get more information about this portfolio standout as well as many others by reading the entire 3,316 word interview, exclusively in the Wall Street Transcript.
Stephen S. Lee is a founding Principal of Logan Capital Management and the firm’s Treasurer. As a manager of growth portfolios, Mr. Lee plays an active role in the security selection for the firm’s large-cap growth and mid-to-large-cap growth portfolios. He is also a member of the fixed income team. Before founding Logan Capital with his partners in 1993, Mr. Lee was employed at Mercer Capital Management and Merrill Lynch.
In this 3,517 word interview, exclusive to the Wall Street Transcript, Mr. Lee describes his firm’s investing philosophy:
“We’re really focused on high-conviction, very true-to-style strategies that can be used by advisers and clients to meet specific client needs when they’re building portfolios to meet their broader goals.
Currently, we run about $3 billion in assets under management. We’re represented by investment advisers and consultants all over the country and have seen some nice growth over the last several years.”
The focus is on consistent performance:
“Our value team really is looking for rock-solid balance sheets, good cash flow, and then they’re using, in some way, dividend yield as a measure of valuation. And our dividend performers team, again, consistent, good balance sheet, looking for dividend growth. All our strategies across the firm will consistently deliver over time a portfolio that follows that expectation…”
This leads to outsized returns on specific stock picks:
“Our best performer last year was a payroll company, Paycom Software (NYSE:PAYC). You wouldn’t expect payroll to be such a rapid grower, but what that company has done well is they’re using software as a service, or a cloud-based technology model, to really improve the way payroll services are delivered to small-to-midsized businesses.
One of the things that really struck us is that this is a management team that continues to innovate, even when they’re doing well.”
Get the complete picture by reading the entire3,517 word interview, exclusively to the Wall Street Transcript.
Russell A. Colombo is President and Chief Executive Officer of Bank of Marin Bancorp. He is a lifelong resident of Marin County in the San Francisco Bay Area. Mr. Colombo joined Bank of Marin in 2004 as Executive Vice President and Branch Administrator after 29 years in banking at Comerica Bank, Security Pacific and Union Bank in San Francisco.
He was appointed Executive Vice President and Chief Operating Officer of Bank of Marin in 2005 and assumed the position of President and Chief Executive Officer in 2006. In his current role, he leads the premier community and business bank in the Bay Area, with 22 branches, five commercial banking offices and one loan production office located across Marin, Sonoma, Napa, San Francisco, Contra Costa and Alameda counties.
Mr. Colombo is a board member of the California Bankers Association, Past Chairman of Western Independent Bankers Association and is a member of its executive committee, and Chairman of the Citizens Oversight Committee of SMART — Sonoma Marin Area Rail Transit.
He received a Bachelor of Science degree in agricultural economics and business management from the University of California, Davis, and his Master of Business Administration in banking and finance from Golden Gate University.
In this 3,326 word interview, Mr. Colombo reveals the long term strategy that his built his bank into a leading, local financial institution.
One of the main drivers to success is geographical economics:
“When we look at the economy in the Bay Area, it’s very, very strong.
A lot of that is driven by technology, because in San Francisco and the Peninsula, there is a concentration of technology companies.
Technology is an integral part of industry sectors across the region, and it certainly drives the economy here. Unemployment in Marin County, where we are headquartered, is running just about 2%, which is kind of the definition of full employment. ”
The local populace provides an extremely low cost of capital for the bank:
“I always look at the deposit base as a way of determining if we’re doing a good job with our relationship banking.
Our current non-interest-bearing demand deposits are running about 50% of our total deposit portfolio, which gives us a very low cost of funds. Our cost of deposits is about 21 basis points.
These are primarily operating balances, which are balances that our customers have in the bank that they use every day for their businesses. If that number is high, it tells you that we’re doing a good job with our relationship banking.
They’re very sticky because they’re keeping their deposits with us, and that certainly translates into good things for the bank from a cost-of-deposits standpoint.
In my mind, relationship banking is measured by that deposit number.
There are many banks that say they are relationship bankers. Yet I don’t think there are many community banks in this country, frankly, that have a deposit portfolio like we do, which really speaks to our proven relationship-banking model.”
Get the complete picture of this bank CEO’s operating strategy by reading the entire 3,326 word interview, exclusively in the Wall Street Transcript.
Timothy Coffey is Director, Banks & Thrifts at Janney Montgomery Scott LLC. Prior to joining Janney in 2019, Mr. Coffey was a vice president and research analyst at FIG Partners LLC, a premier investment banking and research firm specializing in community banks.
Before joining FIG Partners, Mr. Coffey was a research analyst at Green Street Capital Management. Prior to that, he covered the banking industry for several business publications in San Diego, California.
In this 2,551 word interview, Mr. Coffey examines how his West Coast based bank stock investment philosophy has produced superior returns for his investors.
“…The California economy is the biggest component of the national economy. California on its own would be a top-four economy worldwide. So from that standpoint, it’s very robust and diversified.
Within the state, Los Angeles County accounts for roughly one in every four jobs in California. So it’s a very big economy with big job centers. Economists expect the California economy to grow half-a-basis-point faster than the national economy in 2020.”
The surrounding region benefits from this economic juggernaut:
“The top idea we have right now is First Interstate Bank (NASDAQ:FIBK) out of Billings, Montana. It’s a $14 billion asset bank with footprint from the eastern part of Montana all the way out to Oregon and Washington state.
This is the type of company I was talking about before. They have a diversified revenue stream; 20% of their revenue comes from noninterest income sources.”
Another top recommendation is from Washington state:
“Another company that we like is Banner Corp. (NASDAQ:BANR) out of Walla Walla, Washington, on the eastern side of that state. Their footprint goes from the Canadian border down to the Mexican border. It’s a very conservative company. Their loan growth is mid-to-low single digits annualized. ”
Get all the top bank stock recommendations from Mr. Coffey by reading the entire 2,551 word interview, exclusively in the Wall Street Transcript.
Amanda Agati, CFA, is the Chief Investment Strategist for PNC Financial Services Group. She leads the team that establishes overall strategic and tactical asset allocation guidance of client portfolios, oversees the evolution of investment processes, provides thought leadership on key investment issues and authors numerous publications.
She also performs research and analytics that drive the overall investment recommendations of the firm, while also managing the firm’s asset allocation models.
In this 3,38o word interview, Ms. Agati showcases her top picks and portfolio management techniques that have made her an enormously successful portfolio manager.
“…We do have a number of core beliefs and an overarching investment philosophy. And what I would say, at a high level, our investing DNA or mantra is that we believe markets can be inefficient and investment opportunities are ever-changing.
A thorough understanding of the past combined with rigorous analysis of the present really does give us insights into the most probable future outcomes.”
The financial returns for 2020 will be a tale of two markets:
“Our view is that, over the first half, the market will be very focused on the solid improvement in underlying fundamentals and the potential for a global cyclical reacceleration.
We’re seeing kind of the earliest green shoots of that over the last two months forming. But by the time we get to midyear, the focus is going to shift pretty dramatically to the 2020 presidential election. And so that very well could create some additional volatility in the second half as the market wrestles with the potential outcome of that event.”
This bifurcation will create an opportunity for investors:
“…We have found that global infrastructure has some really favorable characteristics, particularly at the later innings of this cycle, when volatility tends to be the name of the game in the market. And so what we like about global infrastructure is that it tends to sit more in the developed world. So this is a little bit different from kind of looking at the emerging markets, but it tends to be exposure largely in the U.S. and developed international. And so it’s an opportunity to kind of play in those markets, stay invested in equity, but dial back a little bit of the volatility exposure.
Get the complete picture by reading the entire 3,38o word interview with Ms. Agati, exclusively in the Wall Street Transcript.
