67 WALL STREET, New York - June 25, 2014 - The Wall Street Transcript has just published its Investing Strategies Report. This special feature contains expert industry commentary through in-depth interviews with highly experienced Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Reactionary Investing - High-Quality Companies - Investing in Special Situations - Secular Growth Themes - Large-Cap, Deep-Value - Defensive Growth Approach - Long-Term Investing - Event-Driven Investment Opportunities
Companies include: Visa, Inc. (V), Mastercard Incorporated (MA), Google Inc. (GOOG), Biogen Idec Inc. (BIIB), Target Corp. (TGT) and many others.
In the following excerpt from the Investing Strategies Report, a professional and highly experienced portfolio manager discusses her methodology and top picks for investors:
TWST: Please start with an overview of ClearBridge Large Cap and its investment strategy.
Ms. Vitrano: The ClearBridge Large-Cap Growth Strategy is a concentrated portfolio, typically 40 to 50 names. We think about owning investments for three years or more, so we like to understand the businesses of potential investments very well so that we have high conviction in our holdings. As a result portfolio turnover is quite low.
TWST: What's your process for understanding a company? What's most important to you when evaluating a potential holding?
Ms. Vitrano: We strive to buy good business models, good balance sheets and good management teams at a good price. That is a vague statement, so let me put a little bit of substance behind that. When we talk about good business models, we are talking about companies that generate high returns, companies that will generate a lot of cash flow in a steady state, and companies that oftentimes have secular tailwinds behind them.
When you are considering holding an investment for several years, it's hard to predict the rate of revenue growth. However, if a business benefits from a secular tailwind like a growing middle class in emerging markets or like increasing adoption of the Internet across our lives, those tailwinds help give us higher confidence in a company being able to achieve above-average growth several years out.
In addition, we look for companies that have moats around their business that help ensure the sustainability of a company's profits. In terms of good management teams, we have found that when management teams have a clearly defined strategy, the employees tend to have a clear understanding of what to do in keeping with those corporate priorities. Most large companies are well-capitalized post the financial crisis, but we do look for companies that are able to fund their own growth over time with free cash flow.
TWST: How do you evaluate corporate management? Do you typically meet with key managers?
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.