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Former CIO Of Duff And Phelps Reveals Top Stock Picks In His Current Institutional Portfolio
67 WALL STREET, New York - November 23, 2009 - The Wall Street Transcript has just published its TWST Investing Strategies Report offering a timely review of the sector to serious investors and industry executives. This 55 page feature contains expert industry commentary through in-depth interviews with highly experienced Money Managers. The full issue is available via The Wall Street Transcript Online.
Topics covered: Investor Demand for Transparency - High-Liquidity Environment - Undervalued High Quality Companies - Inexpensive Valuation - Areas with Risks - Stretched Balance Sheets - High Returns on Capital - Volume Growth - Multi-Cap Approach - Extreme Value Discipline - Macro Outlook - Value and Momentum - Lower Volatility Growth
Companies include: Belo Corp (BLC); 3M (MMM); A.H. Belo (AHC); Affiliated Computer Services (ACS); American Safety (ASI); Ameriprise (AMP); Apache (APA); Apple (AAPL); Atwood Oceanics (ATW); Bank of America (BAC); Boeing (BA); Brown & Brown (BRO); Bunge (BG); CME Group (CME); Capstead Mortgage (CMO); Chevron (CVX); ChinaCast Education (CAST); Citi Trends (CTRN); Coca-Cola (KO); Cognizant Technology Solutions (CTSH); Conseco (CNO); Consolidated Edison (ED); Costco (COST); Cypress Semiconductor (CY); Danaher (DHR); Duke Energy (DUK); FARO Technologies (FARO); GIII Apparel (GIII); Gannett (GCI); Gilead Sciences (GILD); Goldman Sachs (GS); Goodrich (GR); Google (GOOG); Halliburton (HAL); Harley-Davidson (HOG); IBM (IBM); IDEX Corporation (IEX); IMS Health (RX); JPMorgan (JPM); Johnson & Johnson (JNJ); Kimberly-Clark (KMB); Kinross (KGC); Legg Mason (LM); NIC Inc. (EGOV); Nestle and Alcon (ACL); New York Times (NYT); Newmont Mining (NEM); Owens-Illinois (OI); Penson Worldwide (PNSN); Precision Castparts (PCP); Procter & Gamble, (PG); Rambus (RMBS); Research In Motion (RIMM); Roper Industries (ROP); Schlumberger (SLB); Smucker (SJM); Stein Mart (SMRT); Steven Madden (SHOO); Talisman (TLM); Thermo Fisher Scientific (TMO); Transocean (RIG); UnitedHealth (UNH); Universal Health Services (UHS); Wal-Mart (WMT); Washington Post (WPO); WellPoint (WLP); Xcel Energy (XEL); Xerox (XRX); Yamana Gold (AUY).
In the following brief excerpt from just one of the in depth interviews in 55 page Investing Strategies Report, a top tier Money Manager discusses the outlook for the market for investors.
Wayne C. Stevens, CFA, CIC is the Founding Managing Director and CIO of Dearborn Partners. He oversees all aspects of the investment process and is the lead manager for the firm's institutional and private client large cap equity products. Prior to founding Dearborn Partners, he served as President and Chief Investment Officer of Duff & Phelps Investment Management Co. where he directed investment policy and strategy for $40 billion in assets.
Prior to being appointed CIO in 1993, he served as President of Duff & Phelps Investment Research Co. for ten years. Mr. Stevens began his career at The First National Bank of Chicago. During his ten years there, he was Director of Investment Research and Chairman of the Equity Selection Committee. He received his MBA in finance from the University of Wisconsin, and his BBA in Finance from the University of Miami.
TWST: What are your views on financial and health care companies? Do you have exposure in those areas?
Mr. Stevens: We do have exposure to financials, though we are underweight the financial sector compared to the benchmark. We have very little, what I would call, "pure banking exposure." We haven't been favorable towards that area for some time and continue to view the space cautiously.
One of our biggest holdings is Goldman Sachs (GS) - I guess technically now a bank holding company, but definitely not your typical lending institution. We've tried to limit our exposure to traditional banking areas. In other words, we are reluctant to participate in mortgages and U.S. commercial real estate loans. We've gone a different route in terms of participating in financials. As a result, we've invested in Goldman Sachs, as I mentioned earlier, CME Group (CME) and investment management companies such as T Rowe Price Group. In health care, we haven't had exposure to the pharmaceuticals. We've gone to other areas within health care because we've been concerned about generic competition that would adversely affect branded pharmaceutical sales and volume growth. We focused on companies like Alcon, that I mentioned earlier, a Swiss company in the eye care area. We own Gilead Sciences (GILD), which dominates the HIV and AIDS arena worldwide. Further, we've limited our risk to HMOs because we're concerned with health care legislation coming out of Washington.
TWST: What about the energy-related exposure in your portfolio? What are your views on energy and services?
Mr. Stevens: Yes, energy is a very important part of our portfolio, and we have been overweight the sector relative to the benchmark all year. In fact, we just added additional exposure to energy. We like that area for two reasons. First, if the value of the dollar is going to be weak, oil prices, which are denominated in U.S. dollars, will benefit in that environment. Second, the energy sector has economic sensitivity. If world economies are going to improve, the demand for oil will rise. We have focused on companies that have assets in the ground, oil reserves and in locations that are reasonably secure. Also critical, we want companies that are increasing output.
We are not all that sanguine about natural gas. We feel the United States has significant reserves, and we are seeing excess supply, causing us to focus more on oil. For service and exploration companies, we want to be in companies that have a worldwide presence. Our biggest holding in the service area, for example, has been Schlumberger.
More of this interview can be obtained via The Wall Street Transcript Online .
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