Finding Contrarian Value Investments in Financials for the Longer Term: An Expert Portfolio Manager Shares His Top Financial Stock Picks with The Wall Street Transcript
67 WALL STREET, New York - May 29, 2013 - The Wall Street Transcript has just published its Multicap Value Investing 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: Investing in Financial Services - Large Cap Investing - Value Investing - High Quality Companies - Bottom-up Investing - All-Cap Growth Investing
Companies include: Genworth Financial Inc. (GNW), Hartford Financial Services Gr (HIG), MetLife, Inc. (MET) and many more.
In the following excerpt from the Multicap Value Investing Report, an expert portfolio manager shares his portfolio-construction methodology and his investment philosophy:
TWST: I understand that you don't have sector allocations, but I noticed that as of March 31, 2013, you had 21% of your holdings in financials. Why is that? Did you just happen to find several great opportunities around a similar theme?
Mr. Snyder: Occasionally, you will find several good ideas grouped around one theme. In the last 10 years or so, the market has put things in baskets. We don't want to own more than maybe 12% or 13% of a specific theme in the portfolio, but right now we have three life insurers. They all are different types of life insurers and they have different issues, but we like them all.
We own Genworth (GNW), Hartford (HIG) and MetLife (MET), and generally speaking, at least the sell-side would categorize them all as life insurers. We will limit the risk in the portfolio by saying we don't want to have more than 30%, 35% in financials, and let's make sure that those investments are idiosyncratic. We do not want our portfolio reacting to a single issue; that would be imprudent. But it would also be imprudent to ignore opportunities that happen to be in a single sector, and right now, we see several opportunities around the financials theme.
TWST: Right now, you don't have anything in telecom, utilities or consumer staples. Why is that?
Mr. Snyder: I know that theoretically consumer staples, utilities and telecoms are defensive sectors. But with companies in these sectors trading at at 17 times to 22 times earnings, I question their perceived "safety." They are not bad companies, but when you can buy a stock that is cyclical but has much better growth potential and it's trading at a p/e ratio of roughly half of that, it is hard to justify purchasing in those other sectors. We certainly have owned stocks in those sectors in the past, but we do not see anything that meets our investment criteria right now. And if that's the case...
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.
