Peter Strzalkowski, CFA, serves as Co-Team Leader of OppenheimerFunds’ Investment Grade Debt team and is a Portfolio Manager of the Total Return Bond Fund, Oppenheimer Limited-Term Government Fund and Oppenheimer Limited-Term Bond Fund. Before joining the firm in August 2007, Mr. Strzalkowski served as Managing Partner and Chief Investment Officer of Vector Capital Management, LLC, a structured products money management firm he founded.
In this exclusive 3,464 word interview with the Wall Street Transcript, Peter Strzalkowski details the best fixed income investments in his portfolio:
“When it comes to asset-backs, we’re definitely overweight, and I’m not sure if we’re overweight versus our competitors, but we definitely have an overweight in asset-backs, specifically auto ABS. We do not hold any student loan ABS. We have a small allocation to credit card ABS, and we have a small allocation to private label mortgages, but those are all legacy deals from 10 years ago. They’re just stored in our books.”
Mr. Strzalkowski is playing the over-diligence of the Federal Reserve in his bond portfolio:
“The slope between twos and 10s I believe is, over the last year and a half, something like 100 basis points flatter. So we have had a short of the two-year Treasuries expressed via futures in all of our portfolios. And the thought was basically inflation isn’t there, the Fed is being hawkish for something that really hasn’t appeared yet, they’re being proactive, I guess you could call it, and it will be the front end of the yield that will react the most, and we have witnessed that.”
The current trend of rising interest rates will continue:
“The recent capital from abroad comes because we pay people in dollars, and in essence, they buy our Treasuries. So some of the buying will continue to be external via currency flow, the current account flows globally, but I expect that also for the dollar to weaken from a current strong position if those deficits continue, and rates are going to have to be higher at some point. I think it’s a gradual rise, but I think rates will gradually creep up higher over the next two to three years.”
To get the full macroeconomic analysis from Peter Strzalkowski, read the entire 3,464 word interview in the Wall Street Transcript.
J. Jeffrey Auxier is President of Auxier Asset Management LLC and Founder of the Auxier Focus Fund. Prior to forming Auxier Asset Management in 1998, Mr. Auxier spent 16 years at Smith Barney — formerly Foster Marshall-American Express, then Shearson — where he was on the Portfolio Management Advisory Board and the Chairman’s Council, and was Senior Vice President of Investments and Senior Portfolio Management Director.
In his exclusive 2,874 word interview with the Wall Street Transcript, Mr. Auxier lists some stocks that he like to own on a pullback in the market:
“We’re looking for strong business franchises that are utilizing platforms and data analytics. For instance, companies along the lines of an Alphabet (NASDAQ:GOOG). It’s not quite a buy right here, but it’s one that, longer term, we would like to own in a bigger way. They’re a leader in predictive data analytics and artificial intelligence.
YouTube is growing twice as fast as Facebook (NASDAQ:FB) and has over 1.8 billion users. It achieved 20% revenue growth this past year. And they’ve got Waymo, the industry leader in self-driving cars. It took six years to test the first 1 million miles. This year, they went from 7 million to 8 million miles in one month. This model represents a powerful platform that has exponential possibilities in a linear world.
The balance sheet is solid, with $100 billion in short-term securities or cash. It’s very disruptive. In total, advertising in the U.S. right now is running at the lowest rate since 1946. So digital advertising still has huge potential. Companies that have the best data can help the customer better target their market.”
Another stock that has become quite cheap is also on Jeffrey Auxier’s screen:
“Another one that’s really out of favor and is struggling is Wells Fargo (NYSE:WFC), which has been working hard to earn back their customers’ trust with customer-friendly initiatives such as Overdraft Rewind and minimizing standard monthly service fees. Now you’re kind of forced to buy bad news. Either you have to pay a higher price or deal with controversy. That’s another company that’s really cheap, although they’ve got some pretty serious problems, but we think those problems are fixable.”
Read the entire 2,874 word interview in the Wall Street Transcript to get all the top picks from Mr. Auxier.
Bill Caton, CFA, is a Research Analyst and Senior Trader at First Wilshire Securities Management Inc. With responsibilities in portfolio management and trading, Mr. Caton joined First Wilshire’s internship program over 20 years ago and advanced through the ranks. Today, he is a member of the investment committee. He holds a bachelor’s degree from the University of California at Los Angeles with a specialization in business administration.
In this 3,296 word interview, exclusive to the Wall Street Transcript, Mr. Caton describes how his firm builds a portfolio and suggests some top picks for investors:
“We specialize in small-cap value equities where we believe the best long-term returns can be found but also dive a little into midcap, large cap, but our bread and butter is small cap, and we are bottom-up fundamental investors.
We have a very long-term buy-and-hold strategy, and we typically focus in the U.S., some in Canada. We also run an international fund that invests globally with a similar strategy of small-cap value, and our assets under management right now are approximately $375 million.”
One investment example is Tutor Perini Corporation (NYSE:TPC):
“One that I would find very interesting would be Tutor Perini Corporation (NYSE:TPC). As background, it’s the second-largest U.S. contractor in the transportation market and the third-largest U.S. heavy domestic contractor. They are very large civil contractors that also do specialty mechanical, and they also build commercial buildings.
In terms of valuation, it’s trading at about 8.5 times fiscal year 2018 p/e and under seven times fiscal year 2019 p/e. So if you compare it to its peer group, it’s trading at a big discount. In terms of price to book, it’s trading about half of book, relative to its peers that are four times that. So it offers a lot of value, absolute value and relative value, and a key thesis is the backlog has been growing very strongly.
It went from $6.2 billion backlog at the end of 2016 to $7.3 billion backlog at 2017 to now $8.7 billion in 2018…”
To get all the investment detail on this and many others, read the entire 3,296 word interview in the Wall Street Transcript.
Geoffrey Gerber is President and Chief Investment Officer of TWIN Capital Management, Inc. Having founded TWIN in 1990, Dr. Gerber oversees the entire quantitative investment process and general management of the firm. Recognized as a specialist in institutional quantitative investment management, he has been quoted in the financial press and authored numerous articles in books and journals.
Outside of TWIN, Dr. Gerber is a faculty member for the Aresty Institute’s Wharton Executive Education Program on Investment Strategies and Portfolio Management. He participates in a number of foundations’ investment committees and boards, including the Burroughs Wellcome Foundation, the Jewish Federation of Greater Pittsburgh and the Jewish Healthcare Foundation.
Dr. Gerber is also a member of the Editorial Advisory Board of the Journal of Investment Consulting. He holds a Ph.D. in economics and finance, University of Pennsylvania, and a B.S. in economics from the University of Buffalo. In this exclusive 2,775 word interview in the Wall Street Transcript, Dr. Gerber details his proprietary portfolio development took and the top picks it is currently predicting.
“The heart of our investment philosophy is that systematic application of in-house quantitative research coupled with rigorous risk control in portfolio construction affords the best chance of achieving excess return over a benchmark or market index on a risk-managed basis.
Our job is to identify and capture the reliable and predictable sources of returns while minimizing any impact for more arbitrary sources of risk. TWIN differentiates itself from the mainstream investment community with the application of our proprietary Fundamental Tilt, which provides the top-down thematic perspective that complements our bottom-up model.”
This proprietary portfolio investment philosophy has delivered consistent out performance:
“The advantage that TWIN provides can be seen by our Prime strategy. Our Prime strategy has outperformed the market on average in up months, in down months and in sideways months, and that is a fairly unique opportunity for institutional investors. Typically, managers outperform the market on the upside because they’re growth-oriented or they outperform the market on the downside because they’re defensive or value-oriented.
Our TWIN Prime strategy, which is our largest strategy, has generated over almost a 15-year period outperformance in up and down markets. So having the ability to have positive upside capture — meaning outperform the market on average in up markets — as well as outperform in down markets is a feature that our institutional clients really value.”
To get more details on this strategic portfolio development, read the entire 2,775 word interview in the Wall Street Transcript.
Eric Green, CFA, is Director of Research, Senior Portfolio Manager and Senior Managing Partner at Penn Capital Management Company, Inc. Mr. Green began his career at Penn Capital in July 1997. As Director of Research, Mr. Green is responsible for guiding the firm’s day-to-day investment research process.
He also serves as the Portfolio Manager for Penn Capital’s Small Cap, Smaller Companies Growth and Mid Cap equity strategies as well as chairing the Penn Capital Equity Strategy Committee. Throughout his career, Mr. Green has focused on the energy, media, gaming and leisure industries.
In this exclusive 2,950 word interview in the Wall Street Transcript, Mr. Green illuminates his stock picking process and delivers the good news to investors for 2019.
“The uniqueness about Penn Capital is that all of our analysts and portfolio managers cover the entire capital structures of the companies that they follow. For example, if I am looking at a company, I’m looking at the bank debt, the bonds, the converts, the preferreds and the equity. We believe this perspective provides a competitive advantage versus our peers that only focus on one piece of the capital structure.”
One example of this investment style is Golden Entertainment (NASDAQ:GDEN):
“We’ve most recently accumulated a position in Golden Entertainment (NASDAQ:GDEN). Golden owns local properties in Nevada and a small property in Maryland. They recently bought the Stratosphere and Arizona Charlie’s from a private equity firm.
We believe they will invest money into Stratosphere and allow the returns to be significantly higher than they are right now. Valuation is very attractive as they will be paying down the debt once they finish their capital expenditures with the Stratosphere. Golden has an extremely talented management team and is likely to acquire additional properties or become an acquisition candidate themselves.”
Get the complete picture on many of the other top picks from the Penn Capital portfolio by reading the entire 2,950 word interview in the Wall Street Transcript.
Andrew Alexander is Director and Portfolio Manager of Brookfield Global Listed Infrastructure Income Fund at Brookfield Investment Management Inc. Andrew Alexander has 14 years of experience and is a vice president on Brookfield’s global infrastructure team. He is responsible for covering energy infrastructure as well as infrastructure securities that focus on the water and transportation sectors in Europe and Australia/New Zealand.
Tom Miller, CFA, is Director and Portfolio Manager of Brookfield Global Listed Infrastructure Income Fund at Brookfield Investment Management Inc. Tom Miller has eight years of experience and is a director of Brookfield’s global infrastructure equities team. He is responsible for covering North American infrastructure securities focusing on MLPs and the energy infrastructure sector.
In this exclusive 3,435 word interview, these two award winning asset managers detail their stock picking prowess and explain their top picks to investors for the Wall Street Transcript:
“Our process starts with our proprietary screening tool that we use across our infrastructure universe. Within this screening tool, we break it down into three different components. There is the asset quality component, a management quality component and then valuation as the last leg of the stool.
For asset quality, we are really trying to evaluate to understand the quality of the underlying assets and the cash flow trajectory. We are looking at it from a Porter’s Five Forces type of business model…”
The fund is focused on international infrastructure investments:
“Infrastructure, as we define it, consists of natural monopolies with significant barriers to entry, so these are typically long-life, long-duration assets with stable and predictable cash flows. Typically, these types of companies have underappreciated and sustainable growth.
It is similar to the concept of a royalty stream on global economic growth. The sectors are typically toll roads, airports, telecommunication towers, energy infrastructure and utilities…”
Read the rest of this 3,435 word interview in the Wall Street Transcript to get the full detail and multiple stock picks.
John A. McCluskey is President, Chief Executive Officer and Director of Alamos Gold Inc. He has been the President and Chief Executive Officer of Alamos Gold Inc. since 2003. Mr. McCluskey began his career with Glamis Gold Ltd. In 1996, he founded Grayd Resource Corporation, where he was CEO until 2003 and co-founded Alamos with mining hall of famer Chester Millar.
Mr. McCluskey was named Ontario’s 2012 Ernst & Young Entrepreneur of the Year, based on a judging panel’s assessment of financial performance, vision, leadership, innovation, personal integrity and influence, social responsibility and entrepreneurial spirit. Today, Alamos is an established intermediate gold producer with four operating mines in North America and a portfolio of development-stage projects in Turkey, Mexico, Canada and the United States.
In this exclusive 3,291 word interview in the Wall Street Transcript, Mr. McCluskey details his experience in building a gold mining company from the bottom up and explains the future upside:
“… When we purchased the project, gold was around $265 per ounce, and frankly, not a single ounce that had been drilled out by Placer Dome could be produced at a profit given the very low gold price, but that’s typically the time you have to buy. We stepped in and bought it, and we ultimately permitted, financed and built the mine. It’s now been in production since 2005, so roughly 14 years. We’ve produced close to 2 million ounces of gold, and we’ve made over $400 million in free cash flow from that mining operation. So that was the start of the company.”
John McCluskey is excited about the prospects for his new mine in Turkey:
“In addition to that, we have three projects in Turkey that collectively contain about 3 million ounces of gold. This includes a deposit called Kirazli, another called Agi Dagi and the third called Camyurt. The first of those three is under construction right now, and that’s the Kirazli project. It should be in production by the second half of 2020.”
To get the full picture of his Turkish mine as well as many other new projects coming on line for Alamos Gold, read the entire 3,291 word interview in the Wall Street Transcript.
John Ullman is President and Founder of John G. Ullman & Associates, Inc. Earlier, he was President of USGM Securities, Inc., and at Corning Inc. worked in financial management. He received a bachelor’s degree in economics from Johns Hopkins University. He received an MBA from the University of Chicago, with a focus in financial management. He was named the Corning Chamber of Commerce Small Business Person of the Year in 1997.
In this exclusive 6,428 word interview, Mr. Ullman details how to create a successful asset management company with his top portfolio picks for 2019 and beyond.
“We just finished our 40th year of operation, and we believe we have a very special organization. The concept is to be the family business manager, handling essentially everything that is quasi or directly financial-related for extended families. This would include asset management, financial planning, and in the financial planning area, it gets involved with cash flow studies and projections, establishing risk tolerances for investments, tax planning and preparation, insurance reviews, estate planning and many other types of related projects.”
One example of a risk on trade for these experienced portfolio managers is an interesting one:
“We’ve always preferred Emerson over General Electric, but we’re finding GE at these current values to be intriguing, but there is certainly a genuine risk that they’re not going to make it through. The stock, now in the mid-$8 range, could be under a lot more pressure, but if you look at risk/reward opportunity, I think there’s a lot of upside if they can make good strategic decisions, be highly focused and realize they’re going to have to go through further dramatic changes and decide which businesses to hold on to and which to sell, and then try to make those they hold to be very successful. A lot of their businesses are really good businesses.
So you know, one may want to take that on, but you have to be really careful not to have too much exposure in something like General Electric. It can turn very sour, but at these levels, there is a lot of potential underlying value. And it is of interest to us but with limited exposures per account, and we are viewing it as highly speculative.”
Get the full detail on this stock pick and many others in this exclusive 6,428 word interview in the Wall Street Transcript.
Eric M. Teal is Chief Investment Officer and Managing Partner of Queens Oak Advisors. He has overall responsibility for the firm’s investment strategy and results. Previously, Mr. Teal was the Chief Investment Officer of a regional bank and led the organization’s Capital Management Group for over 10 years. Mr. Teal received a B.A. degree in economics and international studies from Rhodes College and an MBA from the University of Memphis.
This award winning portfolio manager reveals some important new stock picks for 2019 in this exclusive 1,760 word interview in the Wall Street Transcript.
“Finally, we’ve begun to warm up to consumer staples after many years of underweighting. Regarding the staple stocks in particular, we’ve invested in Hershey (NYSE:HSY), and really, we see a lot of organic growth opportunities within this food company. We believe that the shares right now are trading at slightly below fair value. They have a little less pricing power than they’ve had in the past, but they’ve been very disciplined in regard to expense management. And we continue to like the growth in the chocolate category as well as some of the new products that Hershey plans to bring to market.
So after really years of flat or underperformance for consumer staple stocks, we’ve looked hard to find a good investment that might do well within the sector and not be subject to the increased volatility that we’ve seen in the stock market over the past year. We believe that the lower volatility of Hershey as well as an attractive dividend yield provide us a favorable investment thesis for the company.
… I think some of the chief concerns will be the emerging and international investments and how they will be impacted with an ongoing trade war with China and how widespread that slowdown might ripple through international markets. ”
Get more current stock picks from this portfolio manager by reading the entire 1,760 word interview in the Wall Street Transcript.
Brien M. O’Brien is the Founder, Chairman and CEO of Port Capital LLC. Prior to establishing Port Capital, Mr. O’Brien co-founded and served as Chairman and CEO of Advisory Research Inc., which under his leadership became one of the leading value investment firms in the country with over $12 billion AUM. Mr. O’Brien is the Chairman of the board of trustees at University of Chicago Medicine and also serves on the board of the University of Chicago. He is a member of the board of the National Parks Foundation and President of the board of trustees of the Sheriffs Meadow Foundation, an accredited land trust based in Martha’s Vineyard, Massachusetts.
Brad Schatz is President of Port Capital LLC and brings more than 21 years of investment experience to Port Capital and is responsible for the firm’s investment strategy and research process. He is a fundamental, value-based portfolio manager focused on investing in small- and mid-cap companies. Before joining Port Capital, Mr. Schatz spent nine years as a portfolio manager and senior analyst with San Francisco-based Snyder Capital Management. Prior to this, he was a portfolio manager at a multistrategy investment firm and a senior analyst at Rothschild Asset Management.
In this exclusive 3,707 word interview, these two award winning portfolio managers reveal the detail in their asset management philosophy and discuss their current top picks. One such example is Versum Materials (NYSE:VSM).
“Because Versum was recently spun off as a separate company, and since the company is focused on specialty materials and chemicals, we believe investors have yet to fully understand and appreciate the differentiation within its product portfolio. At present, roughly 45% to 50% of their products are sole-sourced and proprietary, comprised of hundreds of $5 million to $10 million product lines where Versum can become the processor of record — POR. When you break down Versum’s business lines, roughly 80% of the company’s revenues are tied to advanced and processed materials and on-site services that are highly recurring and tied to wafer growth, not fab or foundry capital investment.
When we evaluate Versum’s business model, we like that the company possesses a collection of hundreds of different products that are vital to their end-market customers, including Samsung (KRX:005930), Micron (NASDAQ:MU), Taiwan Semiconductor (NYSE:TSM) and Intel (NASDAQ:INTC).”
Get the full detail on this and many other stock picks by reading this exclusive 3,707 word interview in the Wall Street Transcript.
