Mark E. Jones is a Co-Founder of Goosehead Insurance, Inc. and has served as its Chairman and Chief Executive Officer since inception in 2003. Under his leadership, Goosehead has grown to be counted among the largest and fastest-growing personal lines insurance agencies in the country.
Prior to joining the company, he was a senior partner and director of Bain & Company, the global management consulting firm. Earlier in his career, he worked in the audit and mergers and acquisitions practice groups for Ernst & Young. He holds a Bachelor of Commerce degree from the University of Alberta and an MBA from Harvard Business School.
In this 3,375 word interview, exclusively in the Wall Street Transcript, Mr. Jones details how he and his wife started an insurance company from scratch.
“First of all, the industry is enormous. There’s over $300 billion a year in personal lines, property and casualty insurance, in the United States — over $300 billion. It’s highly fragmented, so you can build a really successful business, and no one has enough market power that they can stomp you out or get in your way.
There’s just too much fluidity; there’s too much white space in the market. My hypothesis was that it would be very recession-resistant, because if you live somewhere or drive something, you have to buy our product, or you have to buy the product from someone. And that has very much proven to be the case; it’s highly recession-resistant.”
Goosehead prides itself on the economic advantages derived from superior customer service:
“One thing that is very unique — and this doesn’t so much relate to carriers as it does to our own economics — every day, the first email that I see are the call statistics from the prior day. That include things like call volume, hold times, abandonment rates, net promoter score, all of those things; they’re all measures of quality.
We never really benchmarked our cost to deliver service because I know that the longest economic lever in our business is client retention, and so I was prepared to spend what we needed to in order to drive high levels of client retention.
What we found when we did our IPO last year, we did benchmark our cost to deliver service, and we were a little bit surprised to learn that it costs us about 25% of industry best practice — not industry average, industry best practice — to deliver the best service in the world.
And we kind of scratched our heads a little bit at first, trying to figure out how could this be, because we really haven’t focused on managing costs. We focused on delivering quality. What we found is that we took all of the friction points out of delivering service, and those friction points are what drive costs.”
Get the full detail on this successful insurance start up by reading the entire 3,375 word interview with the CEO, exclusively in the Wall Street Transcript.
Thomas G. Kahn, CFA, is President at Kahn Brothers Group, Inc.; President, CIO and Lead Portfolio Manager at Kahn Brothers Advisors LLC; and President at Kahn Brothers LLC. He is on the board of directors of JBI International, Inc., Lighthouse Guild, Ackerman Institute for the Family and American Federation for Aging Research.
Mr. Kahn has over 48 years of industry experience and is a leading practitioner in the field of value investing. Mr. Kahn co-founded Kahn Brothers Advisors in July 1978. He received a B.A. from Cornell University and an MBA from New York University’s Stern School of Business.
In this exclusive 3,362 word interview, Mr. Kahn identifies the source of his wealth building wisdom:
“My middle name is Graham, and I am named after Benjamin Graham, who was a good friend of my father. What we do is we basically study companies. Frequently, we talk to management, visit conferences, etc. And if we find a security that meets our value standards, we buy it.
And what we do is a little different than a lot of other firms because we eat our own cooking: We buy for our own personal accounts what we buy for clients. We deem it to be hypocritical to buy for clients or recommend to clients securities that we do not own and do not buy ourselves, even though we think a security is very attractive.”
There are some interesting investment opportunities identified is this interview. Among them are:
“We like GlaxoSmithKline (NYSE:GSK). GlaxoSmithKline is a big pharmaceutical company with a new manager as CEO, who is doing extremely well in our opinion, and a new President of Research and Development, Hal Barron, who has had a very, very exciting history developing important drugs. The stock yield is over 5% and, in our opinion, is undervalued.”
Another stock pick from this value investor:
“We have owned for a long time New York Community Bank (NYSE:NYCB), which originally started out as Queens County Savings Bank. And through a whole bunch of acquisitions is now a $50 billion bank.
New York Community has a 5.7% dividend yield, which is pretty darn high. And if your goal is to annualize your money at 10% to 12%, you could say you’re sort of halfway there with the dividend yield.”
Get the complete detailed reasoning for these and many others, only in the complete 3,362 word interview and only in the Wall Street Transcript.
Nelson Mills, as President, Chief Executive Officer and Director of Columbia Property Trust, Inc., is responsible for the company’s overall strategy, capital transactions, operations and the performance of its portfolio of investments.
In his exclusive 3,549 word interview with the Wall Street Transcript, Mr. Mills details his operating and strategic vision based on his 30 years of experience in the real estate investment and financial services industries.
Mr. Mills took on a big job at Columbia as a U.S. real estate asset manager:
“So we set out to accomplish several goals: One was to consolidate the portfolio into fewer markets. Importantly, we wanted to choose what we thought were the best long-term markets for Class A office, so we settled on Manhattan, San Francisco and Washington, D.C.
We’ve now sold 65 of our original 75 properties, which equates to just over $4 billion of transactions across our $5 billion of owned assets, and we have redeployed the capital into our selected markets.”
The CEO has detailed location based logic for his investment strategy:
“But to go one step further, even within those three markets, we’re very particular about the submarket, the neighborhood and the type of property we invest in.
For example, in Manhattan, we’ve focused on Midtown South and smaller floorplate, boutique buildings. They’re well-located, with nice amenities but with smaller, flexible, more manageable floorplates.
The traditional financial district building in upper midtown, with the larger floorplates and the more commodity-type office space, has struggled a bit, and they’ve lost a lot of their tenancy to the new construction around the city.
Midtown South has not experienced that attrition and has continued to grow rents very substantially. So even within Manhattan, we’re focused on a particular type of building, location and submarket within the city.
We’ve done the same thing in our other markets. For example, in D.C., we’re only focused inside the district. There are some fine properties and some good submarkets in Virginia, but we’ve really focused on CBD D.C.
In San Francisco, we’ve stayed in the central business/financial district; Market Street and just south or north of Market has been our focus.”
Get the complete detail on this investment opportunity by reading the entire 3,549 word interview, only in the Wall Street Transcript.
Jim Lykins is a Vice President and Research Analyst at D.A. Davidson & Co. and joined the company in November 2015 to expand coverage of the real estate sector, focusing on retail. Mr. Lykins was named Thomson Reuters’ “Top Stock Picker” in Equity Real Estate Investment Trusts in 2017.
In his 1,979 word interview, exclusively for the Wall Street Transcript, he picks the best REITs in the sector, here’s just one:
“Another name we like right now is UMH (NYSE:UMH). Again, there is an affordable housing crisis right now. And this is a value-add play. These guys will go out, buy properties that are as low as 50% to 60% occupied.
They’ve been doing this for decades; they know what the secret sauce is. They go in, they make improvements, they will typically take about three years to take a property from that 50%, 60% level to 90%-plus occupancy, and then wash, rinse, repeat. That’s the strategy in a nutshell.”
A familiar them for Mr. Lykins is the lack of housing in the US:
“Manufactured housing, one of the nice things about that sector right now is we have — it sounds bad, but one of the nice things about that space is, we have an affordable housing crisis right now, so there is plenty of demand for their product.”
And there is always a good case to be made for opportunistic turn around story stocks:
“Another name we like right now is Braemar Hotels & Resorts. They have a different strategy than the rest of the group; they’re focusing on the luxury segment. A couple of catalysts for them: Their Ritz-Carlton in the Virgin Islands is undergoing a significant renovation due to hurricane damage, so that one should be fully back up and running later this year.
They are up-branding a couple of Courtyard hotels to Autograph Collection hotels, so there are a couple more catalysts that should help accelerate FFO growth later this year.
They’re also up against easy comps this year. Last year, it was kind of the perfect storm; they had headwinds from several nonrecurring events like hurricanes, wildfires, red tide, low snowfall, so they’re up against much easier comps this year…”
Get the full detail on many other stocks in the complete 1,979 word interview with Jim Lykins, Thomson Reuters’ “Top Stock Picker” in Equity Real Estate Investment Trusts in 2017.
Anthony Paolone is an Executive Director covering REITs and real estate service stocks in the equity research department of J.P. Morgan. Prior to joining the firm, Mr. Paolone was Co-Head of Real Estate Stock Research at CIBC World Markets and was an associate at Donaldson, Lufkin & Jenrette Securities Corp. and Prudential Securities.
His 2,412 word interview, exclusively in the Wall Street Transcript, looks at both the macro and specific economics of real estate assets:
“…If you see S&P 500 earnings continue to be revised down and interest rates remain low, then we think these stocks will actually do fairly well. And so it’s a bit driven by the macro in our view right now at the group level…But two areas I’d also point out that, at the margin, we’ve been a little bit more bullish on than we’ve been historically are the healthcare REITs and the triple net lease REITs.”
Among the REIT universe, Mr. Paolone indentifies the few that stand out for his recommendation:
“Another name that we like a lot on the residential side is American Homes 4 Rent (NYSE:AMH). What we like about that business is we think the single-family rental demand right now is very robust, especially when you think about outsized household formation compared against new construction of housing in the U.S. that’s less than the level of demand.
You’re actually underbuilding on the housing side, and the for-sale housing market really slowed through the course of 2018 and into 2019. We think that puts more folks into rentals longer, and we think that benefits American Homes 4 Rent quite a bit.”
The specific sweet spot includes several stand out stocks:
“AMH, Invitation Homes (NYSE:INVH) and Front Yard Residential (NYSE:RESI) in the public markets, are running with occupancy levels that are in the mid-90s, which is better than I think we all expected them to be at this point. Margins are into the 60s, which is reasonably close to where traditional multifamily margins are. I think in a broad sense the business models have proved to be quite viable, but we’re still in the early days, and there are still things to work out.”
Read the entire 2,412 word interview in the Wall Street Transcript to get the complete list of high performing REITs.
Bhavan Suri, Partner, Co-Group Head of the technology, media and communications sector, joined William Blair & Company, L.L.C. in 2007 and specializes in the IT services and enterprise software industries. Previously, he worked in venture capital and early-stage technology commercialization.
Before joining the financial services industry, he co-founded and managed a Boston-based enterprise software company. Before that, Mr. Suri was a Director at Answerthink, an IT services firm that specialized in systems integration and enterprise software implementation.
Mr. Suri won an award in the Financial Times/StarMine “World’s Top Analysts” listing as the number one stock picker in IT services in 2010. He received a B.S. in physics from Brown University and an MBA from the Kellogg School of Management at Northwestern University.
In this 4,126 word interview, Mr. Suri details his top stock picks, exclusively for the Wall Street Transcript. Two of his favorites are Smartsheet (NYSE:SMAR) and Appian (NASDAQ:APPN):
“…The low-code/no-code space, it’s the idea that a line of businessperson, an individual who is not a technologist, can actually use something that looks and feels like Excel to automate processes.
The software generates code underneath behind the scenes, but the user is unaware of the complexity of the code and can simply automate a process or workflow, which had historically been done manually.
We think a lot of that automation will continue; it’s still very early days for the low-code/no-code market. And that’s what Smartsheet does, for example.
Appian allows you to build very complex applications much, much faster. And when you think about digital transformation and all that’s happening at large organizations today, which is all about adding more technology and automation and workflow optimization, and you also realize we have a dearth of really, really good software developers.
So technologies that allow us to leverage really good software developers or leverage business folks to build software technology should be a very strong secular tailwind over the next five to 10 years.”
Read the entire 4,126 word interview to get the complete list of 2019 stock picks from this award winning equity analyst.
Jason Deleeuw, CFA, is a Vice President and Senior Research Analyst at Piper Jaffray & Co., covering financial and business services companies. He had worked as a research analyst at Piper Jaffray from 2006 to 2011 covering financial services companies. Prior to rejoining Piper Jaffray in 2014, Mr. Deleeuw was a senior analyst on the financial equities long/short team at Pine River Capital from 2011 to 2014.
In this exclusive 2,792 word interview in the Wall Street Transcript, Mr. Deleeuw examines the potential of blockchain technology and whether investors can profit from specific bets on this new category.
“In terms of the negatives, the technology itself, blockchain technology, it’s costly to implement, and it’s questionable whether it’s even better than traditional database technology that we have right now. I think that’s still an open-ended question.
And then, the other thing, you need all the players in the business ecosystem to collaborate with the blockchain. And will those players in an ecosystem, are they truly willing to give up control to whatever the computer, whatever the protocol code or design is?
And if those businesses aren’t willing to give up control, then the question is: Is there really any difference between blockchain technology and traditional database architecture technology? Because the key value on blockchain, again, is that there is no censorship resistance, transactions can’t be blocked by a single entity.”
There are key positive attributes for blockchain based investments:
“…The cryptocurrency enables an exchange of value, so you can do transactions within a blockchain ecosystem. Again, there’s no censorship resistance, those transactions can’t be blocked, and you could exchange things globally without having to do FX conversion in and out of different fiat currencies.
There are some positives there, but the key negatives are the volatility of the cryptocurrency is just extreme. The processing speeds are a lot slower; the transaction processing costs are a lot higher.”
Read the rest of the 2,792 word interview and get the specific investing advice you need from Piper Jaffray analyst Jason Deleeuw.
Brett Huff, CFA, is Managing Director at Stephens Inc. Mr. Huff is a managing director leading the business services team. He joined Stephens Inc. in April 2005 as research associate covering title, insurance broker and financial services technology companies.
Prior to joining Stephens, he was an associate analyst at Southwest Securities focused on the specialty retail industry. He also previously worked at OpenAir, Inc., a private software company in Boston, which was subsequently purchased by NetSuite, Inc., where he held Director of Product Management and Director of Marketing positions.
Prior to that, he worked at Deloitte Consulting as a management consultant. Mr. Huff obtained his B.A. in social studies from Harvard University and received an MBA, focusing on finance and strategy, from the Kellogg School of Management at Northwestern University.
In this exclusive 4,406 word interview, Mr. Huff explains in detail how his financial technology company coverage universe has resulted in his amazing 30% annual return rate for his investors.
“Of these several themes across our coverage list, I think the two that are most interesting are the scale theme and the frictionless theme. We see the scale theme expressed, for example, by Fiserv looking to buy First Data and FIS looking to buy Worldpay.
These are two very large deals happening very near each other and back to back that have, in our view, really reignited the question about M&A scale.
And then, the second most interesting theme is around the frictionless consumer experience. So far, that’s been mostly expressed in the e-commerce payments use case. But we think it is also evolving into bank digital channel use cases, including internet banking.”
One specific stock that has exemplified Mr. Huff’s investment advice is Square (NYSE:SQ):
“Square certainly was high on our list when we last spoke, and the stock ultimately ended up performing very well. I think it’s one of the great stock stories of the last couple of years and played out more or less like we expected.
My thesis back when Square was beginning its journey as a stock was that I thought that the company, while a payments company to start out with, would ultimately be a bit of a platform company. So kind of an IT platform for small business, where Square would develop additional products beyond payments and kind of bolt them on and make it easy for small merchants to use.
And that’s what I think happened through a variety of new products, including some marketing products, some finance products, and some vertical-market-specific products for restaurants and retail.
…I think that is the interesting long-term growth story or one of the interesting long-term growth stories for Square. Although again, it’s largely built into its 12 times forward revenue multiple. So I still like that quality in Square but would wait for a little bit different price before it was more attractive.”
Get all the detail on this and many other fintech stocks in this 4,406 word interview, exclusively in the Wall Street Transcript.
Ronnie Moas is the Founder and Director of Research at Standpoint Research, Inc. He started Standpoint Research in 2004. He began his career on Wall Street as an analyst and market strategist at Herzog Heine Geduld.
Earlier, he worked at Shuki Weiss International Concert Productions where a few of his production credits included the Haifa Seaport Blues Festival, Bob Dylan, Radiohead, Buddy Guy and Suede. Mr. Moas was a sergeant in the Israeli army from 1987 till 1990.
In this wide ranging 3,579 word interview, Mr. Moas puts out a wide ranging explanation of his recommendations and the current and future upside to the cryptocurrency markets.
“They ask me, “What is backing bitcoin?” And my response is, “What is backing the U.S. dollar?” I am 52 years old. The U.S. dollar has lost half of its value since I was in high school.
At least bitcoin acts as a currency should, with upward pressure on the price. And it has a capped supply. There is no printing press printing this out the way you can print the U.S. dollar and devalue it.
I put out my bitcoin recommendation on July 3, 2017. It was at $2,570. It has jumped by more than 50% since then. On a fork-adjusted basis, the return was higher. My target looking out to next year is $28,000.
We are at $3,920 right now. I think there is, I would say, a 40% chance that we see $28,000 next year, which is not a bad return for something with a 40% probability — if you think my odds are accurate.”
Mr. Moas recommends specific cryptocurrency investments:
“You don’t want to try to be a hero and pick a flower from all of the weeds on coinmarketcap.com. There are hundreds of scams and names that are overvalued or worthless, and there is no regulation. You are playing with fire when you try to be a hero and look for things that nobody has discovered yet.
I think you should play it safe. I recommend putting 40% to 60% of your crypto money in bitcoin, and then, you spread out the other 40% to 60% across a dozen or two dozen names that are in the top 50.”
Get all the specific recommendations from Ronnie Moas of Standpoint Research in this 3,579 word interview on the cryptocurrency market, exclusively in the Wall Street Transcript.
David Weinstein joined Dana Investment Advisors in May of 2013 and is currently a Portfolio Manager. He is responsible for security selection and portfolio analysis across Dana’s equity strategies. He received both an MBA and undergraduate degree from the University of Notre Dame and a degree from the University of Pittsburgh School of Law.
in this 4,046 word interview, exclusively in the Wall Street Transcript, Mr. Weinstein explains how his firm does well for investors by offering a highly selective ESG fund.
“ESG investing utilizes environmental, social and governance criteria to evaluate investment opportunities. Related terms include “socially responsible” or simply “responsible investing” as well as “sustainable investing.” Our main equity ESG strategies launched in 2000, so they have quite a long track record.
Some of the areas we analyze are climate change impacts, disclosure policies, history of fines and regulatory actions, and waste- and water-reduction efforts. These clearly fall under the “E,” or environmental factors.
Some social considerations are workforce diversity, labor and human rights policies, and product and workplace safety issues. Governance includes CEO compensation, board independence and composition, and stakeholder alignment. We believe ESG integration can generate alpha and/or reduce risk.”
The Dana Investment Advisors fund managers have created an investor friendly advocate:
“In July of 2018, just two years after actually completing the EMC deal, Dell decided that they wanted to buy back this tracking stock. And the price they offered for DVMT was approximately $0.60 on the dollar. At that time, across our strategies, we held a fairly large position in VMware, and we had a smaller position in the tracking stock DVMT.
We were very concerned about this offer for several reasons. We felt there was an ethical issue. If you come out and you sell to the public a stock and state your intention is that it is worth one-to-one or 100 cents on the dollar in 2016, and then, two years later, you want to buy this stock back for $0.60, that’s an obvious management-credibility issue.
As owners of VMware, we were also concerned that if this deal went through at the price that Dell offered, it would strengthen Dell’s financial position. They already owned 80% of VMware. Dell could possibly take out the remaining 20% of VMware at a similar discount. So we felt this was a worrisome situation…
We wrote a letter to Dell in July and began talking with some other institutions about working together on this issue, using some of the ESG collaboration resources that we have utilized in the past…
We…had a call scheduled with the lead director of VMware on the very day that Dell decided to raise the bid in early November. Dell raised the bid, and we felt the new valuation was reasonable.
As a result, in our social ESG strategy, VMware was the best-performing stock in the second half of 2018. DVMT was the best-performing stock in our growth strategy. We held to our convictions, and this was meaningful to our investment performance.”
Read the entire 4,046 word interview to get the more examples of ESG investing upside, only in the Wall Street Transcript.
