67 WALL STREET, New York - February 5, 2013 - The Wall Street Transcript has just published its Investing in Asia and Other Strategies Report offering a timely review of the sector to serious investors and industry executives. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Investing in Asia - Growth at a Reasonable Price - Longer-Term Investing - Asia Pacific Investment Theses
Companies include: Wells Fargo & Company (WFC), Jefferies Group Inc. (JEF), The Bank of New York Mellon Co (BK), Goldman Sachs Group Inc. (GS), American International Group, (AIG), The St. Joe Company (JOE), Brasil Telecom Participacoes S (BRP), CEMEX, S.A.B. de C.V. (CX), USG Corp. (USG), Gildan Activewear Inc. (GIL) and many more.
In the following excerpt from the Investing in Asia and Other Strategies Report, two expert portfolio managers discuss their investing methodology and top picks for investors:
TWST: Would you give us three examples of your current stock holdings that you believe are representative of your investment approach? And tell us what you like about each of those stocks.
Mr. Heldman: One of the companies that we like and we own currently is Wells Fargo (WFC), which is one of the largest banks in the country now. What we like about the company is that is has an extensive branch network across the country. It would be very difficult for a new competitor to establish the type of branch network that Wells Fargo has. They also have a very large deposit base, which is very low cost in today's environment. They are paying very little in the way of deposit rates.
So we think that's a very strategic asset because the deposit cost is so low that the company doesn't have to stretch for yields on the asset side. They are able to invest in safer assets and still have a reasonable amount of earnings. The financial industry is coming out of one of the worst downturns in decades. It's still somewhat out of favor but we like the business, we like the fact that valuations are reasonable. And we like management. Management has shown that they know how to allocate capital. They are very good about making sure that capital is allocated appropriately and to the extent that they have excess capital, which they had over the years, they have been good at returning that to the shareholders through dividends and share repurchases.
I should mention that, over the last two or three years, we have had a pretty large position in the financial services industry in general. That includes Jefferies Group (JEF); Bank of New York Mellon (BK); Goldman Sachs (GS); Fairfax Financial (FFH.TO), which is a Canadian insurance company; and lastly American International Group (AIG), which is a more recent holding. We like good businesses, but we like to buy them when they are selling at below-average valuations.
We think we've identified a small group of financial companies with above-average businesses, selling at below-average prices with managements that we think are particularly attuned to shareholder value...
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.
- Investment & Company Information
- American International Group
- American International Group