50 Year Super Investor Arnold Van Den Berg Discusses His Value Stock Picking Methodology and Current Picks and Pans in this Exclusive Interview

Wall Street Transcript

67 WALL STREET, New York - November 26, 2013 - The Wall Street Transcript has just published its current Investing Strategies Report. This special feature contains expert industry commentary through in-depth interviews with highly experienced Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Large-Cap, Deep-Value - Bottom-Up Stock Selection - Repurchase Activity - Value Oriented Strategy - Investment Risk Management Strategies - High-Quality Blue-Chip Companies - Free Cash Flow Yield - Alternative Investing, Ultimate Returns

Companies include: Jacobs Engineering Group, Inc. (JEC), CDI Corp. (CDI), Corning Inc. (GLW), Intel Corporation (INTC), International Business Machine (IBM), MDC Holdings Inc. (MDC), Toll Brothers Inc. (TOL), Layne Christensen Co. (LAYN), Alcoa, Inc. (AA) and many others.

In the following excerpt from the Investing Strategies Report, Arnold Van Den Berg discusses his investment methodology and current top picks for investors:

TWST: Would you share with us a few of your top investment ideas?

Mr. Van Den Berg: There are several major positives going on in the economy right now. First, there is a tremendous revolution taking place in low-cost energy due to new technologies in hydraulic fracking and horizontal drilling. The U.S. is producing more natural gas today than any time over the past 30 years. By 2017, the U.S. will likely be a major exporter of natural gas. Bringing the cost of natural gas down is a positive for the whole economy, and this will really help those stocks that use natural gas in their manufacturing process.

One of the main beneficiaries will be chemical companies. Because of this new low-cost energy, chemical plants are expected to spend $70 to $100 billion to expand, update and build new plants over the next five to seven years. Fertilizer companies will be another beneficiary. For example, an Egyptian fertilizer company, Aramsco, recently came over to the U.S. to build a plant because the natural gas prices are cheaper here than they are in the Middle East. Nobody would have believed this was even possible five years ago.

Our portfolios currently own two companies that we believe will benefit from this chemical buildout. Jacobs Engineering (JEC) provides technical and construction services that include engineering, design and architectural services, among many other services such as consulting. Currently it is priced above our "buy" point for a new position, yet we continue to hold our current investment because we believe this company has a bright future.

The second company that we like in this investment theme is CDI Corporation (CDI). CDI provides engineering and IT staffing services to clients in many industries, including oil and gas, chemical and industrial equipment. It, too, is currently above our "buy" price, and like Jacobs Engineering, we believe CDI is worth following.

The second positive development taking place in our economy is the major manufacturing renaissance going on in America. I believe this is going to be so significant that I label it as another industrial revolution. Given the tremendous breakthroughs taking place in artificial intelligence, 3D printing, robotics and nanotechnology, it's hard to see it any other way. Furthermore, America is a leader in almost every one of these areas.

Let me give you an example in the artificial intelligence and robotics area. In July 2013, the U.S. Navy landed an unmanned fighter jet on the aircraft carrier USS George H.W. Bush. When you consider that the computer had to factor in airspeed, altitude, the angle-of-attack, pitching, a rolling flight deck, not to mention the changing winds and seas, this was a historic landing for the Navy and maybe equally so for robots and artificial intelligence.

Numerous technology companies will benefit from this manufacturing renaissance. Three companies we own and like over the long run are Corning (GLW), Intel (INTC) and International Business Machines (IBM). While they are trading between our established "buy" zones and fair values as of this interview, they are good companies to keep an eye on...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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