Midwest Stocks with Durable Competitive Advantages Power this Portfolio: A Wall Street Transcript Interview with Andrew R. Adams, CFA, CIC, Vice President of Mairs and Power, Inc., and Portfolio Manager of the Mairs and Power Small Cap Fund

Wall Street Transcript

67 WALL STREET, New York - February 17, 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: Investing Strategies - Portfolio Managers - Small Cap Investing - Upside in Small-Cap Stocks - Bottom-Up Stock Selection - Lowered Risk - Large-Cap Growth - Capital Appreciation

Companies include: Valspar Corp. (VAL), Loews Corporation (L), Buffalo Wild Wings Inc. (BWLD), Badger Meter Inc. (BMI), Titan Machinery, Inc. (TITN) and many others.

In the following excerpt from the Investing Strategies Report, a portfolio manager discusses his investing methodology and top picks for investors:

TWST: Could you please begin with a brief history of Mairs and Power Small Cap Value and an overview of the core philosophy and guiding strategies?

Mr. Adams: The Mairs and Power Small Cap Fund was launched August 11, 2011, so it's about two and half years old now. There are a couple of underlying philosophies at Mairs and Power that we use to invest; one of them is that we're very long-term-focused. So if you were to look at our Growth Fund or our Balance Fund, those funds have both been around for about 50 years now. The turnover is in the single digits, and that's something we wanted to focus on with the Small Cap Fund as well.

Turnover isn't quite that low, but still the plan is to keep it significantly below the other investment managers in the small-cap space. The reason for that is we just feel we can make fewer better decisions. Personally, I look at the stock market and the typical investor out there and it just seems to me that the vast majority of the market is inappropriately focused on the very short term. What's going to happen the next quarter? Are they going to meet or miss or beat the next quarters' earnings? If you can take a step back and focus a little bit longer term, it just seems there aren't as many investors focused on that so it creates an opportunity for us.

The other difference with the fund is that it is a more regionally focused fund, which is the case with the Mairs & Power Growth and Balance Funds as well. We are located in Saint Paul, Minnesota, and about two-thirds of the portfolio is upper Midwest. We really try to focus on investing what we know. Having spent our entire careers in the upper Midwest, all the investment managers have gotten to know these companies extremely well...

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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