Jerry Barag serves as Chief Executive Officer of CatchMark Timber Trust, Inc. and is a member of the firm’s board of directors.
He joined the company in 2013 and brings over 30 years of real estate, timberland and investment experience, including expertise in acquisitions, divestitures, asset management, property management and financing. Mr. Barag previously served as a Principal at TimberStar Advisors, an Atlanta-based timberland investment consulting firm, where he specialized in acquiring and managing U.S. timberlands.
From 2004 to September 2011, he served as Managing Director of TimberStar, a timberland investment joint venture of iStar Financial, Inc. and other institutional investors. While at TimberStar, he oversaw the acquisition of more than $1.4 billion of timberlands in Arkansas, Louisiana, Maine and Texas.
He previously served at an Atlanta-based investment manager specializing in timberland investment planning and at Lend Lease Real Estate Investments, where he served as Chief Investment Officer and Chairman of the investment committee.
He earned a Bachelor of Science degree from The University of Pennsylvania, Wharton School.
In this exclusive 2,643 word interview in the Wall Street Transcript, Mr. Barag explains in detail what it takes to make his investors rich:
“We looked at where we wanted to buy and own timberland assets for the long term to harvest and sell timber.”
Mr. Barag is competing with some established companies:
“When you look at the competitive landscape, you have two companies — Weyerhaeuser and Potlatch — that have significant manufacturing operations, and so they are using their timberlands as an input for their manufacturing operations in some cases; in other cases, they’re selling timber to the outside world, but less than we do.
And you look at the other competitor, Rayonier, which has a very significant real estate business because a lot of their historical timberlands were close to I-95 on the Florida-Georgia border.
That has obviously turned into much more of a real-estate-oriented activity around land ownership and development than growing trees.
So by comparison, at CatchMark, we are really a pure play.
As of today, we own or control through joint ventures just under 1.6 million acres of timberlands…”
Get the complete picture of CatchMark Timber Trust by reading the entire 2,643 word interview, exclusively in the Wall Street Transcript.
Tamara D. Fischer has served as an officer of National Storage Affiliates Trust since its inception in 2013, and she currently serves as President, Chief Financial Officer and Secretary/Treasurer for the company.
Before joining NSA, from 2004 to 2008, Ms. Fischer served as the Executive Vice President and Chief Financial Officer of Vintage Wine Trust, Inc., a real estate investment trust focused on assets in the U.S. wine industry. She continued to serve Vintage Wine Trust as a consultant through its dissolution in 2010 and served in various other consulting positions until becoming involved with NSA.
From 1993 to 2003, Ms. Fischer served as the Executive Vice President and Chief Financial Officer of Chateau Communities, Inc., one of the largest real estate investment trusts in the manufactured home community sector.
In this exclusive 1,931 word interview in the Wall Street Transcript, Ms. Fischer explains the unique expansion method that National Storage uses for its rapid growth:
“Our business model is different from our peers in that NSA consists of a group of regional operators who have contributed their portfolio to NSA in exchange for equity in NSA. These PROs continue to manage their contributed portfolios and also manage new acquisitions in their respective regions.
This structure allows us to have enhanced local expertise across markets and facilitates robust acquisition growth, which has outpaced our public peers since our IPO.
NSA completed its IPO in April of 2015 with six PROs, and we recently added our 10th PRO, Moove In Self Storage of York, Pennsylvania.
NSA also has an internal property and asset management platform that we acquired in 2016 called iStorage. iStorage currently manages two joint ventures for NSA totaling approximately 175 stores, in addition to over 30 corporate-owned stores.”
Get the complete picture on this interesting financial structure by reading the entire exclusive 1,931 word interview in the Wall Street Transcript.
David Webb is the Senior Vice President, Corporate Development & Strategy for Hallmark Financial Services, Inc. and has been with the company since 2018. Prior to that, Mr. Webb worked for State National Companies, which was acquired by Markel Corporation in 2017, as SVP of Reinsurance and Program Underwriting.
Between 2005 and 2009, he held capital markets roles for a life reinsurance company and later advised on a consulting basis. In this 2,069 word interview, Mr. Webb goes into detail on what makes his insurance company a great investment:
“…The company has been in the process of a strategic transformation over the past four years. Back around 2014, the company was primarily known as a regional auto writer, with nearly two-thirds of its premium coming from auto-related products.
Today, this business accounts for less than half.
In addition, in 2014, the company wrote about 55% of its premiums in Texas and Louisiana, and today, that amount is about one-third of our premiums. That profile change is primarily a result of the growth in our new specialty product lines.”
Beyond making money on writing insurance, the company makes money on managing its balance sheet:
“We also have a 23% allocation to bank loans. What we like about these securities is that they are fully secured by the borrower, but the rating only gets partial credit from the collateralization, and yet it has a coupon rate more closely linked to their unsecured rating.
You get a little extra return, from our view, for the risk.”
Hallmark Financial also creates returns from its operational expertise:
“We had a good 2018, and it’s good to highlight a couple of points here. Operating earnings for the full year were roughly $1.01 per share, which was a great improvement from the prior year, in which we had a loss of about $0.60 per share…Another way to look at operating earnings in this context, for 2018, operating earnings returned 8.9% on beginning tangible book value.”
Get the complete story by reading this entire 2,069 word interview, exclusively in the Wall Street Transcript.
Joseph Lacher has served as President and Chief Executive Officer of Kemper Corporation (NYSE:KMPR) since November 2015. He previously served in other senior executive roles in the insurance industry. From November 2009 to July 2011, Mr. Lacher was President of Allstate Protection, a unit of Allstate Corporation, where he led the company’s property and casualty offerings serving more than 17 million American households.
Prior to Allstate, Mr. Lacher spent 18 years at The Travelers Companies, Inc., most recently serving as Executive Vice President – Personal Insurance from 2002 to 2009 and additionally as Executive Vice President – Select Accounts from 2006 to 2009.
In this exclusive 2,434 word interview, Mr. Lacher explains he differentiates his insurance company and makes his investors happy:
“Kemper is the old Unitrin insurance operations. It was a child of the Teledyne Corporation back when Henry Singleton built the company and used insurance and the cash flows out of insurance to help build and fund his industrial conglomerate.
Eventually, Unitrin was spun off as a standalone company, one of a number of them that were spun off of Teledyne. Over time, Unitrin purchased the legacy Kemper, a preferred auto and home business, from Lumbermens Mutual, as Lumbermens was going out of business.
So most people think of Kemper and they know it’s a long and storied brand name, and think of that old Lumbermens Mutual business. We got a piece of that. Eventually, Lumbermens went out of business. We bought the Kemper name and rebranded ourselves accordingly. We still have the Kemper personal lines business inside of our franchise from that.
We’ve always been a portfolio of niche or specialized insurance businesses, and that’s what we are today. And I think it’s a nice portfolio of those specialized businesses.”
Get the complete pictures on this specialized insurance provider, directly from the CEO in this exclusive 2,434 word interview, only in the Wall Street Transcript.
Jon Christensen, CFA, is a Portfolio Manager and Senior Research Analyst who has primary research responsibilities for the small- and mid-capitalization health care sector at Kayne Anderson Rudnick Investment Management.
Before joining Kayne Anderson Rudnick in 2001, Mr. Christensen was a portfolio manager and senior research analyst for Doheny Asset Management.
In his exclusive 5,138 word interview with the Wall Street Transcript, the Kayne, Anderson fund manager details his investing philosophy and the methodology behind several top current holdings:
“We don’t usually keep a lot of cash in the account, right, because we want to find companies that will hold up well during difficult economic times. Traditionally, that is why we don’t need to hold a lot of cash because our companies will protect us on the downside.
We also give ourselves sector benchmark weightings that are typically within plus or minus 10% of the Russell sector benchmark weighting. But I will tell you that we are OK being completely empty or naked certain sectors.
So again, we usually buy high-quality businesses or low-capital-intense businesses with not very much debt on the balance sheet.”
One example is Elanco (NYSE:ELAN):
“Another name we own that is a recent IPO in the last year is Elanco Animal Health (NYSE:ELAN). Elanco is a spinoff from Eli Lilly (NYSE:LLY) from 2018. They develop, manufacture and market for both companion and production animals in the United States and internationally as well.
They make products for worms, fleas and ticks for companion animals. They also make animal therapeutics for pain, osteoarthritis, and ear infections and other conditions. They also have production animal products, such as ruminants and items for swine production.
So we like this business because, in health care, it is driven a lot by the animal companion market.”
Get the detail on many more top portfolio holdings by reading the entire 5,138 word interview, exclusively in the Wall Street Transcript.
Henry Song, CFA, is Portfolio Manager of Diamond Hill Capital Management, Inc. He is Portfolio Manager of the Diamond Hill Short Duration Total Return and Core Bond strategies. He has been with Diamond Hill since 2016. Before that, he was a portfolio manager with JPMorgan Asset Management.
In this 3,408 word interview, Mr. Song describes the demand for his product:
“When we launched the strategy in 2016, it became a great solution for people looking for income in a rising rate environment. These shorter-duration investments have worked out well for clients who have invested in the strategy, and we don’t see any competing strategies out there with as much emphasis on short-duration structured product.”
One method for increasing short term returns safely was nonrated bonds:
“In my view, bonds that are not rated aren’t necessarily poor credit. This status is just the nature of assets being securitized. For example, some assets tend to be short duration in nature. By the time the issuer goes through the rating process, most of the loans will be paid off.
It is not necessarily cost-efficient for the issuer to get a rating for the bonds. By going to the nonrated space, the issuer ends up saving money, and they are able to pass on a lot of the savings to buyers like us. It is a win-win for everyone.
Obviously, we are cognizant of the amount of nonrated securities in the portfolio because often it can be perceived as being illiquid, which is not necessarily the case.
Typically, these nonrated bonds are done on a club basis whereby only a few large investors are shown the bond and the bond gets placed with one of them. We were able to get a seat at the table because of some of the relationships I have built over the years.
The sector actually trades extremely well in the secondary market. A lot of the dealers make two-way markets on a daily basis for these bonds. They are no less liquid than anything else out there, but they are still perceived as a potential risk.
Therefore, we cap our below-investment-grade and nonrated exposure to 20% and manage to that exposure level.”
Get the rest of the portfolio structure and Henry Song’s investing philosophy by reading the entire 3,408 word interview, only in the Wall Street Transcript.
Charles Lannon, CFA, is Senior Vice President, Portfolio Manager and Head of Equities at Cidel Asset Management Inc. He manages Cidel’s equity team and is lead manager on the Cidel Global Equity strategy and its various balanced strategies. Prior to joining Cidel in 2004, he worked at a major accounting firm’s corporate finance practice and for a mutual fund firm. He received B.A. and MBA degrees from the University of Toronto.
In his 3,224 word interview, exclusively in the Wall Street Transcript, Mr. Lannon describes his investing philosophy and details the reasoning behind his top picks:
“Within the asset management arm, we have a real cash flow orientation toward investing. We like businesses that generate a lot of predictable cash flow and prove the strength of that cash flow by returning cash to shareholders in the form of dividends and buybacks.
Our approach to risk management puts a lot of emphasis on the resilience and probability of cash flow. How we think about the quality of a business is very much related to the predictability and the resilience of the cash flow through business cycles as well.”
One example is described by Mr. Lannon:
“A recent U.S. stock we’ve bought is Amphenol Corporation (NYSE:APH). It is a U.S. manufacturer of sensors and connectors. Those are sort of unique components that are used in a variety of industries including defense, telecom, consumer goods and automobiles.
And it is well-poised to continue to grow its business at a greater-than-GDP-growth clip, due to the ongoing proliferation of both sensors and connectors in all those products. Those are two industries that don’t have a ton of industry concentration. The larger firms such as Amphenol should be able to continue to take share.
It’s a stock that we followed for quite some time, but we always thought it was a little bit pricey, but it was one of the names that we picked up early on in the new year after it, along with so many other stocks, had a difficult Q4. We were able to buy some shares in the low $80 within the first couple of weeks of January. We are quite pleased with that.”
Read the complete 3,224 word interview for the rest of Mr. Lannon’s top picks, exclusively in the Wall Street Transcript.
Daniel M. Miller is Executive Vice President of Gabelli Funds, LLC, and Portfolio Manager of several mutual funds, closed-end funds and separate accounts. Mr. Miller launched the Gabelli Focus Five Fund, a concentrated best ideas strategy in 2012. Mr. Miller joined Gabelli in 2002 after graduating magna cum laude from the University of Miami.
In this exclusive 1,986 word interview only found in the Wall Street Transcript, Mr. Miller details his new unique fund:
“The entirety of the portfolio will be invested in the pet economy, but 20% might be companies that also participate in other businesses. For example, some companies may have pet food as one product line. Take a company like Smucker’s (NYSE:SJM) that has done several acquisitions in the pet food category.
Its most recent deal was a $2 billion transaction. They purchased Ainsworth Pet Nutrition to get into the natural and organic area. Yet, Smucker’s is a much more diversified business, and so that would fall into the other 20% category as defined in the prospectus.”
Mr. Miller explains many of his top picks in the interview:
“Another is Covetrus (NASDAQ:CVET), which was recently formed when Henry Schein (NASDAQ:HSIC) spun out its veterinary distribution business.
It simultaneously merged with a technology platform called Vets First Choice, a private company. Covetrushas a very robust practice management and technology solution that is focused on compliance. This is an important trend that will lead to growth in the pet economy.
You come home from the vet with medication and might be on top of it for a couple days or weeks, but then compliance starts to decline. Even though you truly love your little dog, it isn’t probably the first thing on your mind every morning.
So Covetrus will use technology and a mobile app, with reminders, emails and text messages, to ensure that you treat your dog as you might your own human child. That is going to increase the longevity of your pet’s life and increase the revenues and profits of the veterinarian.
It is a very interesting business model with a lot of growth potential. The average vet today spends about $50,000 a year with Covetrus. The company projects that figure could be upward of half a million dollars a year. So a 10 times growth opportunity over the next five years or so.”
Get the complete picture on this and many other pet industry investment opportunities by reading the entire 1,986 word interview, only in the Wall Street Transcript.
Amit Kumar is Director and Senior Analyst of P/C insurance at The Buckingham Research Group. Mr. Kumar currently focuses on large-cap multiline insurers, midcap insurers and Bermudian reinsurers.
Mr. Kumar previously worked at Macquarie Securities from 2009 to 2017. In 2005, Mr. Kumar joined Fox-Pitt Kelton, which was acquired by Macquarie Securities Group in 2009. Prior to that, he worked at Dowling & Partners Securities, LLC for four years.
In his exclusive 2,466 word interview with the Wall Street Transcript, Mr. Kumar lets investors know where he stands on many different insurance stocks:
“In our view, Progressive Insurance (NYSE:PGR) appears to be fully valued based on its current stock multiple. Our analysis of this data indicates that loss cost trends are plateauing, pricing is flat to down and repair costs are going up — partially offset by declining bodily injury costs.
We might be at the peak of this cycle and results might be flattish from here. Hence, we would consider lightening up on personal-auto-predominant stocks based on valuation.”
The specific recommendations come with specific reasoning and justification:
“Switching over to The Hanover Group, a smaller regional player, the three reasons are: one, impactful capital management from a disposition. The Hanover Group used to own a Lloyd’s of London entity called Chaucer.
This entity was sold in 2018, and The Hanover Group received north of $800 million of funds. These funds have been redeployed in an accelerated share repurchase program as well as a special dividend.
We anticipate additional return of capital in 2019 apart from the previously announced return of $450 million. There’s a documented correlation between how stocks perform compared to capital management strategies.”
Find out the rest of Mr. Amit Kumar’s picks in this key business sector as well as his top short idea for the year by reading the entire 2,466 word interview, exclusively in the Wall Street Transcript.
J. Paul Newsome is a Managing Director and the Senior Insurance Analyst in the Research Department of Sandler O’Neill + Partners, L.P. Previously, he was Vice President and the senior property-casualty insurance company research analyst at A.G. Edwards and at Lehman Brothers.
Mr. Newsome has worked in or covered the insurance industry for over 20 years. Prior to Lehman Brothers, he worked at Dain in Minneapolis, and Oppenheimer and Company.
In this 1,797 word interview found only in the Wall Street Transcript, this highly trained economist identifies the key sectors for growth within the insurance industry:
“For example, workers’ compensation insurance, you are seeing prices pretty much across the board decline. It’s a very profitable business currently on an absolute basis, but it looks like the margins are being squeezed there.
You saw some very heavy losses in commercial auto, and that has resulted in perhaps an acceleration of price increases there. You’ve seen in liability insurance some small uptick in inflation and then product-specific price increases here and there, places like E&O insurance. So it is an environment where it’s not uniform in terms of what’s happening from a competitive perspective.”
There are several insurance stocks that Mr. Newsome is recommending, and he does not hesitate to indentify them:
“Our best idea for the year was Progressive (NYSE:PGR). This is a company that had just an absolute spectacular year last year, and there’s much expectation that they just will not be able to repeat that level of performance…I think that investors are underestimating the earnings potential for the company, and I think the valuation doesn’t reflect what I think they’ll earn in a year or two. So we like that company quite a bit from a stock perspective.”
Get the other top picks from Mr. Newsome by reading the entire 1,797 word interview found only in the Wall Street Transcript.
