Brian Boyle discusses Boyle Capital. Mr. Boyle is a focused value investor whose strategies are influenced by Ben Graham and Warren Buffett. His goal is to compound capital without taking significant risk. He defines risk as the likelihood for permanent loss over time rather than in terms of day-to-day volatility. In the current environment, Mr. Boyle believes the broader markets are unlikely to deliver attractive returns. He thinks investors should look for opportunities with catalysts that will uncover value. One area where Mr. Boyle is finding such opportunities is in equities focused on natural gas. In addition, at a time when most investors are shortening their time horizons, Mr. Boyle sees tremendous advantage in adopting a long-term view.
Full interview available here.
Paul Wong discusses Sprott Asset Management LP. Mr. Wong works on the precious metals funds at the firm. He manages with a long-term view toward capital appreciation. As precious metals are highly volatile, Mr. Wong believes one of the firm’s strengths in the sector is to be able to generate strong returns with a good risk-management process. One of the reasons Mr. Wong thinks precious metals make sense in the current environment is because of the negative interest rate policies. According to Mr. Wong, gold is currently in a corrective phase, which will lead to good-quality companies outperforming dramatically.
Full interview available here.
Nick Heymann, Co-Group Head at William Blair & Company, says General Electric Company (NYSE:GE) is the only company in his diversified industrial manufacturing universe that has the potential to double in price by 2020 to around $60 a share. He discusses the key elements supporting this belief.
The first is the acceleration of GE’s digital and data analytics, both as an internal productivity driver but especially as an immensely profitable provider of standalone software, real-time data and predictive analytics to other companies. GE Digital’s external sales in 2016 should reach an estimated $6.5 billion and are targeted to grow to $15 billion by 2020.
The second factor is faster organic sales growth, which we believe can expand to 6% to 7% from 2017 onward versus 2% to 4% expected in 2016.
The third catalyst is upside sales and earnings growth from Alstom Energy. GE completed its $10.4 billion acquisition of Alstom Energy in November 2015. Since then GE has been accelerating the integration of Alstom Energy by pulling forward much of the targeted 2017 and 2018 restructuring initiatives into the first half of 2017. GE has also been able to significantly increase the organic growth of Alstom Energy’s backlog; it was up 22% in the first eight months after it was acquired through the middle of this year, and we believe will be up substantially more by the end of the third quarter of 2016 from year earlier levels.
Arthur Norton discusses Araglan Capital Management. Mr. Norton manages other people’s assets with a large-cap equity portfolio. He is oriented toward income and total return, and uses the S&P 500 as his benchmark. Mr. Norton follows nine of the 10 sectors of the index, but energy is the only sector he aims to have close to the benchmark. His portfolio is diversified and currently holds 57 companies. With his clients seeking to enhance and improve their assets, Mr. Norton’s goal is to invest in stocks that perform for his clients.
Full interview available here.
Eric R. Heyman discusses Olstein Capital Management, L.P. and the Olstein Strategic Opportunities Fund. Mr. Heyman is a value investor, and he looks for solid small and midsize businesses that have been unfairly punished by short-term factors. By analyzing a company’s financial statements, Mr. Heyman gains insights into the business and its challenges. It also allows him to assess if a company can successfully close the valuation gap within 18 to 24 months. Rather than focus on growth and earnings, Mr. Heyman looks at a business from an owner’s perspective and focuses on free cash flow, which he considers to be the lifeblood of a company.
Full interview available here.
Stan Meyers covers a wide range of segments in media. His core thesis is that traditional media is under a lot of pressure from new media, and advertisers are shifting budgets from TV to digital. He also says consumers are looking to cut the cord from traditional pay-TV services. Mr. Meyers says this shift is allowing some companies to meaningfully benefit as digital trends are now creating new revenue streams.
Full interview available here.
Michael Kupinski is constructive on traditional media companies, because they are transitioning to a digital future or sticking to traditional strengths. He is seeing signs that advertisers are cycling back to traditional media.
Full interview available here.
Nick Heymann covers aerospace and industrials. Mr. Heymann says markets for aerospace continue to be healthy, while industrial end markets are languishing. He has a selective approach to investing in industrials.
Full interview available here.
John Franzreb discusses small-cap capital equipment companies. Mr. Franzreb says there are three themes pervading the sector: exposure to the oil and gas market, manufacturing efficiency and the importance of restructuring actions. He says the small-to-micro industrial space is a good place to invest because it is tied to manufacturing efficiencies on the factory floor, new product introductions and ways to improve processes without adding significant labor cost and overhead. Mr. Franzreb says once the global GDP starts resuming more meaningful growth, the returns on the small-cap space will be sizable.
Full interview available here.
Tim Nollen says the TV ad market has strengthened, as marketers are questioning the value of digital advertising and falling back to TV. He says another theme is around cord-cutting and what digital distribution of TV content means in general. Third, he says there’s been more focus on improving the existing system in terms of measurement.
Full interview available here.
