Wall Street Transcript Interview with Brian Frank, President of Frank Capital Partners and the Portfolio Manager of the Frank Value Fund: Investing in Concentrated Value

Wall Street Transcript

67 WALL STREET, New York - April 3, 2013 - The Wall Street Transcript has just published its Investing in Gold and Value for Downside Protection Report offering a timely review of value and gold related investing strategies. 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 - Global Investing - Investing in Gold - Precious Metals

Companies include: Berkshire Hathaway Inc. (BRK-A), Apple Inc. (AAPL), CA, Inc. (CA), BMC Software Inc. (BMC), Goldman Sachs Group Inc. (GS), International Business Machine (IBM), H&R Block, Inc. (HRB), Quality Systems Inc. (QSII) and many others.

In the following excerpt from the Investing in Gold and Value for Downside Protection Report, an experienced portfolio manager discusses his investment philosophy:

...Another example of a small-cap technology company that we love is RPX Corp. (RPXC), and the ticker symbol is RPXC. Not a very inventive name, but what we like about them is, again, it's a very stable business. So this is a company that's trying to be a peacemaker, I would say, between the "patent troll," meaning the intellectual property aggregators that pretty much just buy up a lot of I.P. and sue the large-cap technology companies. So RPX kind of goes in the middle.

They have the large-cap technology companies as their client base, they get a very stable fee from those companies and they try and deal with the companies that own the intellectual property. Instead of the I.P. companies having a bunch of lawsuits going on, they can deal with RPXC, which represents 120 clients. This cuts down on legal fees for both sides. Pretty much the only people that lose are the lawyers, and who doesn't like to hurt lawyers?

And one more from large-cap technology is Computer Associates (CA), the ticker is CA. Computer Associates and BMC Software (BMC) are the only two large-cap technology names that basically write software for mainframe computers. Mainframe might sound like a term from the 1970s, but it's used today in things that are mission-critical, like credit card transaction processing and trade execution at Goldman Sachs (GS). So they use mainframe computers primarily from IBM (IBM), and these are the only two companies that actually write the software for it. So it's an extremely stable business, it has extremely high cash flow and yet they are very out of favor right now because there hasn't been a lot growth at CA. But there hasn't been any contraction either and the cash just keeps coming in.

They raised the dividend significantly last year and the stock price still is kind of languishing around the mid-$20s. All the names I mentioned are cycle-proof. If the economy were to get a lot weaker, CA would still be producing a lot of cash. So that's something we're intently focused on.

TWST: Would you tell us about your sell discipline via an example of a stock you recently sold?

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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