67 WALL STREET, New York - March 13, 2014 - 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: Bottom-Up Stock Selection - High-Quality Companies - Dividend-Paying Stocks - Midcap Growth Strategy - Secular Growth Themes
Companies include: Copart Inc. (CPRT), Cognizant Technology Solutions (CTSH), Tesla (TSLA), and many others.
In the following excerpt from the Investing Strategies Report, an experienced portfolio manager discusses his investing methodology and top picks for investors:
TWST: Could you please begin with an overview of the fund, its strategy and investment approach?
Mr. Bowen: The objective of the Wasatch Heritage Growth Fund is to build a portfolio of high-quality midcap growth companies. We generally target companies in the $3 billion to $15 billion market cap range. Our approach is to do thorough, bottom-up research on companies with a goal to make meaningful-sized, long-term investments that grow with those businesses.
TWST: What's your process like for adding a specific holding to the portfolio? How do you make your investment decisions?
Mr. Bowen: We generally focus on three core metrics; earnings growth, return on capital and valuation. So first, we're growth investors. We want companies that are capable of sustaining about 15% EPS growth over a long period of time. Quality though is probably our most important area of focus. Specifically, we want companies that can sustain high returns on capital over a long period of time. We then look at other attributes of quality like strong balance sheets, excellent management teams, best-of-breed financial models and businesses operating with strong tailwinds.
And then finally, valuation is never forgotten or ignored. We maintain five-year models on all of our holdings, and if we can't justify the valuation based on the numbers in our models, we just don't own the stock. So relative to our index, our portfolio on average has better return on capital metrics with less financial leverage, comparable growth metrics and cheaper valuation metrics.
A big part of our process also relies 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.
- Utility Industry
- Basic Materials Industry
- Cognizant Technology Solutions