A Wall Street Transcript Interview with Kenneth M. Conrad, Ph.D., a Portfolio Manager for the BMO Custom Quantitative Solutions Group: Create a Stable, High Yield Equity Fund

Wall Street Transcript

67 WALL STREET, New York - April 15, 2014 - The Wall Street Transcript has just published its Investing Strategies Report . This special feature contains expert investment advisory through in-depth interviews with professional Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Dividend-Paying Stocks - Capital Appreciation - Small Cap Investing - Upside in Small-Cap Stocks - Investing Through Construction Trends - Dividend-Paying Small Caps - MLP Investing - Global Macro Trends

Companies include: Apple Inc. (AAPL), Comcast Corporation (CMCSA), Wells Fargo & Company (WFC), Pfizer Inc. (PFE), Merck & Co. Inc. (MRK), Time Warner Cable Inc. (TWC), Centurytel, Inc. (CTL), Gilead Sciences Inc. (GILD) and many others.

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

TWST: Could we look at a specific technology holding that exemplifies the philosophy of the fund?

Dr. Conrad: Absolutely, how about Apple (AAPL)? Apple didn't have any yield two years ago. And then, since last year, it's a top 10 holding, has a 2.2% yield and about $20 billion in net cash. We expect that yield to increase over time, and it scores incredibly well in our model. I wouldn't say the valuation is very demanding; it's about 12 p/e. So it scores well in our model, the yield is appropriate, and fundamentally we think there are a lot of ways to win with the name.

They have a new form factor coming out for their phone; it's going to be a larger phone. It appears that they're revamping their Apple TV product. In fact, there was some news earlier this week about them and Comcast (CMCSA) in effect teaming up a bit. We're anticipating a wearable this year, kind of like an iWatch. And then there's plenty of ways that they can juice things up with the capital deployment. In the last year or so they've repurchased about $40 billion worth of stock out of their $60 billion authorization, and we wouldn't be surprised if they add a new buyback after that, plus we are expecting a dividend increase. The stock is generally inexpensive relative to IT and the S&P 500. So we like that name.

TWST: What about in financial services? I believe you said that is your largest sector holding.

Dr. Conrad: Wells Fargo (WFC) is our largest holding. That's another stock that fits the process quite well, scores very well in our model and is just generally a well-run bank...

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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