67 WALL STREET, New York - August 8, 2013 - The Wall Street Transcript has just published its Deep Value Investing 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 Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Bottom-Up Stock Selection - Value Oriented Strategy - Value Investing - Deep Value - Small Cap Investing
Companies include: Mattel Inc. (MAT), Dr Pepper Snapple Group, Inc. (DPS), The Coca-Cola Company (KO), Pepsico, Inc. (PEP), Johnson & Johnson (JNJ), Procter & Gamble Co. (PG), Centurytel, Inc. (CTL), Liberty Property Trust (LRY) and many more.
In the following excerpt from the Deep Value Investing and Other Strategies Report, an expert portfolio manager discusses his portfolio-construction methodology and his investment philosophy:
TWST: Would you provide some examples of stocks in your portfolio that you believe are really representative of your investment approach?
Mr. Abella: I'll start with Mattel (MAT). That has been a key holding in our strategy and our fund. And this is a name that, at 16 times earnings, I think is a good value. It is near the high end of its range, but compared to other consumer companies that have reasonable growth, I think Mattel still represents good value.
From a dividend point of view, the yield at 3.1% is attractive. It's been growing in the low teens, and I think going forward a high-single-digit growth rate is very reasonable. The earnings growth has been in the 10% to 12% range, and topline revenue has been growing in the high-single-digit range. So it's been a steady performer, a good value name with solid earnings and dividend growth as well.
And I think it's a good way to play a continued growth in the improvement of the economy, both in the U.S. and potentially worldwide. This company was pretty stress tested in 2008 through 2010, and it did hold its sales pretty well. Generally in retail, toys are cut last in the cycle. People will give up other items in retail and try to maintain the toy spending.
And the bottom line is, I think that if the economy does continue to improve, people will buy more toys and Mattel will be a beneficiary of that. They are very well poised from a franchise point of view to capture that. It's been cheaper in the past, but I still think 16 times earnings is an attractive point in this market right now.
I'll go into another name, which also is a consumer name, Dr. Pepper Snapple (DPS). This is a smaller beverage company and at 15 times earnings, it's a lot cheaper than rivals Coca-Cola (KO) and Pepsi (PEP), great companies but a little pricier at 19 times...
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.