Hidden Value in the Tech and Finance Spaces as Companies Show Ability to Generate and Sustain Cash Flows: Expert Portfolio Manager Rafael Resendes Discusses How He Finds Opportunities in Large-Cap Stocks
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: Would you begin with a recap of your investment philosophy and some characteristics that make it unique?
Mr. Resendes: I think the last time we spoke we had just underwritten a relatively large position in the financial space. We'd noticed that financials had been unduly sold off. And we saw firms such as Bank of America (BAC) trading down around $5 a share at end of 2011, and essentially, we made financials the largest concentrated portion of our fund, not so much from the quantitative side, though it definitely showed up there, but on the opportunistic side.
I think at the time Bank of America probably constituted about a 6% investment for our fund. Today, it's now up to close to 16% through appreciation, and it's almost triple. That, I think, is an aspect of our fund that's really unique. Some managers are constantly having to force investments because so much of their fund is qualitative. We have the luxury of really having a systematic process that's consistently worked, and at the same time, we have the flexibility and the expertise to be able to take advantage of what I think are really unique opportunities in the marketplace.
A year and a half, two years ago, as I mentioned, that was happening in the financial space. What we've been noticing recently is that the same phenomenon is starting to take place in the large-cap technology space. A lot of these firms are unloved because they're not delivering crazy topline growth, and the market is really starting to misunderstand the story in terms of what type of value is hidden in these firms' ability to generate cash flow and the sustainability of those cash flows.
TWST: Do you have other views about the market or economy right now that are informing your investment strategy?
Mr. Resendes: With respect to the market, earlier in the year, we came out with a position that we believed the market was...
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.
