Interview with Morley Campbell, a Portfolio Manager, Analyst and Managing Director with NFJ, an Allianz Global Investors Company: a Small Cap Dividend Paying Methodology

Wall Street Transcript

67 WALL STREET, New York - August 5, 2013 - The Wall Street Transcript has just published its Deep Value Investing and Other Strategies Report. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Bottom-Up Stock Selection - Value Oriented Strategy - Value Investing - Deep Value - Small Cap Investing

Companies include: International Game Technology (IGT), Cracker Barrel Old Country Sto (CBRL), Atmos Energy Corp. (ATO), and many others.

In the following excerpt from the Deep Value Investing and Other Strategies Report, an experienced small cap portfolio manager discusses his methodology and top picks:

TWST: Would you begin with an introduction to NFJ Investment Group and tell us a bit about your own professional background?

Mr. Campbell: NFJ Investment Group is the value platform for Allianz Global Investors. As of the end of the first quarter, NFJ Investment Group had $40.1 billion under management. We have strategies that span the globe and are both domestic and international. Every holding across all of our strategies pays a cash dividend. We are very strong proponents of dividend-producing equities.

The team is comprised of 10 investment professionals with an average of 18 years of industry experience. I joined NFJ Investment Group in 2007 out of Harvard Business School, and I've worked on a number of our strategies since then. Prior to Harvard Business School, I was in investment banking at Lazard and at Merrill Lynch.

TWST: Tell us about your investment philosophy as it pertains to the Small-Cap Value Fund.

Mr. Campbell: There are three main tenets to our investment philosophy. The first one is the focus on dividends. We think that dividends help ensure that companies have disciplined capital allocation. Dividends are a sign of balance sheet strength, and dividends are a check on the quality of earnings. And then, at a high level, dividend-paying stocks collectively outperform their non-dividend-paying counterparts over time. So focusing on just dividend payers gives us a tailwind before we start our fundamental research.

The second key tenet of our investment philosophy is a focus on relative and absolute valuations. We like our investments to be reasonably priced with respect to earnings and with respect to cash flow. Not only do we like the valuation metrics to be...

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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