U.S. Markets close in 6 hrs 21 mins

Constructing a Portfolio Like a Baseball Team, in Which Each Stock Has a Specific Role: An Expert Portfolio Manager Discusses His Strategy with The Wall Street Transcript

67 WALL STREET, New York - April 19, 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: Cardinal Financial Corp. (CFNL), Community Bank System Inc. (CBU), Esterline Technologies Corp. (ESL), Kaman Corp. (KAMN), Hub Group Inc. (HUBG), Atlas Air Worldwide Holdings I (AAWW), Alaska Air Group Inc. (ALK), inContact, Inc. (SAAS), Exterran Holdings, Inc. (EXH), International Business Machine (IBM), Oracle Corp. (ORCL), Johnson Controls Inc. (JCI) 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: Would you explain some of your best ideas or stories at the moment?

Mr. Pohl: We kind of feel that every stock we hold has a role. If you want to use the analogy of a baseball team, you need a left fielder, you need a right fielder, you need a shortstop, etc., and you don't know where the hitter or the economy or the business is going to take you next, or which fielder is going to be required to do his or her job.

As I mentioned earlier, we're fairly heavily positioned in the bank sector, because we feel that the vetting of the last credit cycle has only just been completed. Typically, this group doesn't roll over until that whole cycle has played through. We own a stable of small-cap banks, such as Cardinal Financial (CFNL) and Community Bank System (CBU) that have done well for us. They're diversified both geographically by business mix, and they include middle market, consumer-industrial and, to a lesser degree, some residential exposure. Specifically, we've tried to filter for banks that didn't stray into bad credit practices during the 2006-2007 bubble. That stable of bank holdings has helped us.

Also, presently there has been a migration back toward U.S. manufacturing, and we have owned a diversified group of capital goods companies that have contributed very nicely to performance, such as Esterline Technologies (ESL) and Kaman Corp. (KAMN). Drilling down into specifics, we own several transport companies, ranging from asset-light brokering entities, such as Hub Group (HUBG), all the way up to airfreight carriers, such as Atlas Air Worldwide (AAWW) and, in a couple of cases, commercial airlines, including Alaska Airlines (ALK), although we trimmed our airlines back into strength in recent months.

Since about 2004, we've been consistently overweight in technology, because we observed that organic growth is not the only path to revenue growth for large, multiline infotech companies. Acquisition is part of their revenue-growth strategy...

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.