Finding Long-Term Value in Large-Cap Tech Stocks Driven by an Understanding of Expectations: Portfolio Manager Rafael Resendes Shares His Firm's Investment Philosophy with The Wall Street Transcript

Wall Street Transcript

67 WALL STREET, New York - September 4, 2013 - The Wall Street Transcript has just published its Multicap Growth Investing Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Investing in Financial Services - All-Cap Growth Investing - Disciplined Growth Approach - Global Economy - Top-Down and Bottom-Up Investing - High-Quality Growth

Companies include: Intel Corporation (INTC), Bank of America Corporation (BAC), Apple Inc. (AAPL), Hewlett-Packard Company (HPQ), Microsoft Corporation (MSFT), Morgan Stanley (MS) and many more.

In the following excerpt from the Multicap Growth Investing Report, an expert portfolio manager discusses the outlook for the sector for investors:

TWST: You mentioned Intel. Would you provide us with three other examples of your current stock holdings and tell us what attracted you to each name?

Mr. Resendes: So with Intel, one of the themes that we often play on, and it stems from our discipline and understanding value, is we believe strongly in the concept of an emotional arbitrage. And by that, I mean crowds tend to overreact, and the financial media tends to overhype. And it is the combination of those two factors that tends to lead to a compounding effect that overall trends tend to over- and under-value stocks consistently.

We see that now in the large-cap tech space. We saw Apple (AAPL) slide from $700 down into the high $300s, and we began buying in the low $400s to high $300s. We did not buy in to the extreme pessimism or impatience driving the "piling on" effect of Apple not having any products, and the extreme pessimism that went along with Apple not having the newest, greatest flash bang innovation of the hour. We were happy to see weak hands out of the stock.

So when we tend to buy a stock, we tend to buy it with a relatively longer-term view. We're not a fund that trades a lot. We tend to do our research and have a fair set of stringent requirements to purchase a stock. And we tend to have a lot of conviction when we buy - and it's not driven by emotion, it's driven by an understanding of expectations. So Apple is a stock that its sell-off qualified for us to buy it, so we established a decent position there.

Staying in the large-cap tech space, we had a large portion in Hewlett-Packard (HPQ), and we've done very well with that this year, watching it almost double. I think our third largest position in the fund at the moment is in Microsoft (MSFT), and again, it's very, very similar type of thesis to what we have with Intel. We see everybody is focusing on the news that the PC market is...

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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