Owning Well-Managed Stocks for the Long Term is Key to Value Investing: Portfolio Manager Francois Rochon Discusses His Top Picks, Which Include Fastenal (FAST) and Bank of the Ozarks (OZRK)

Wall Street Transcript

67 WALL STREET, New York - April 22, 2013 - The Wall Street Transcript has just published its Investing in Energy, MLPs and Other Strategies 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 Portfolio Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Value Investing, Long-Term Investing, High Quality Companies, Investment Strategies, Large Cap Investing, Investing in Energy, Oil and Gas

Companies include: Wells Fargo & Company (WFC), M&T Bank Corp. (MTB), Bank of the Ozarks, Inc. (OZRK), Fastenal Co. (FAST), CarMax Inc. (KMX), Walt Disney Co. (DIS), Union Pacific Corp. (UNP), Berkshire Hathaway Inc. (BRK-A), JPMorgan Chase & Co. (JPM) and many more.

In the following excerpt from the Investing in Energy, MLPs and Other Strategies Report, a portfolio manager discusses his investment philosophy and his portfolio-construction strategy:

TWST: What is it about that one that sticks out for you?

Mr. Rochon: I think Ozarks is very well-managed. They are very conservative in their loans so they have very low charge-off ratios. They are very low-cost, so their efficiency ratio is much lower than the average. So they can earn much higher return on assets than the average. They earn something like 2% on assets, which is tremendous.

We like the CEO, George Gleason. We think he is a great banker. Ozarks is not very well-known and not very well-followed, but it has been growing 15% to 17% a year for many, many years now. And it's still very small, so we think it can continue to grow at a rapid rate in the future.

We've owned a retailer called Fastenal (FAST) for many, many years. We bought that in 1998, so it's been close to 15 years in portfolio. The stock has done very well. It's very well-managed. We also like CarMax (KMX), the big used-car auto retailer. We bought it in 2007.

In terms of bigger names, we own The Walt Disney Company (DIS) since 2005. We bought in the day Bob Iger was named CEO, and we think he is one of the best CEOs in corporate America. And lately we bought Union Pacific (UNP), which we think will do very well going forward.

TWST: Let's talk about something you've held for a long time. Would you take us through how you got in and why you stayed so long on a particular stock?

Mr. Rochon: What we really like about CarMax is they really changed the industry, which was mostly dominated by...

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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