67 WALL STREET, New York - September 16, 2013 - The Wall Street Transcript has just published its Multicap Value Report. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Bottom-Up Stock Selection - Large-Cap, Deep-Value - Value Oriented Strategy
Companies include: Dover Corp. (DOV), Avery Dennison Corporation (AVY), 3M Co. (MMM) and many others.
In the following excerpt from the Multicap Value Report, an experienced portfolio manager discusses his stock picking methodology:
TWST: Would you give us one more example of a company that caught your attention that you put in the portfolio?
Mr. Sellecchia: We have a small position in Ascena (ASNA). Ascena used to be called Dress Barn. They made an acquisition in June 2012 of Charming Shoppes. Charming Shoppes had two underperforming businesses, Lane Bryant and Catherines. Up to that point, Ascena had made a couple of very smart acquisitions, Justice and Maurices, which took the company from being a Dress Barn-driven company to having a broader channel, teens business in Justice, and with Maurices, a foothold in the smaller demographic markets. David Jaffe, who is the CEO, has done a good job of integrating those acquisitions.
So here comes Charming Shoppes, which is underperforming, they paid quite a bit of money for it but given the management's history of being able to improve acquisition performance, we thought that it made sense to take an initial position, especially as the stock came under pressure when they reported disappointing same-store results. They generate good cash flow, which they have used to keep a strong balance sheet despite making acquisitions.
TWST: You mentioned management a couple of times. Is that an important factor when you are weighing stocks?
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.