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Five money managers examine portfolio management strategies in the latest issue of The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info541.htm

TWST: Do you have any outstanding winners over the past year that you’re particularly proud of?

Mr. Geller: One that I’m particularly happy with is Landry’s Restaurants (NYSE:LNY). This is a stock we purchased a few years ago in the $7-$8 range. The company then had some problems and we got into some contentious issues with management. Management did not at the time seem to be doing what was best for shareholders. However, they certainly got the message and regained their focus. The company repurchased a lot of its stock and the chief executive officer, who considered leaving the company for a period of time, actually stepped up and repurchased a significant amount of stock himself. The company was then able to get itself back on track, and right now the stock price is in the high $20s, so it’s basically quadrupled over the past few years. Along the way they’ve just executed very well. They made two very good acquisitions, and right now I think that they’re looking to continue to execute their business well and make further acquisitions. All the share repurchases by management in hindsight turned out to be great investments for the company, for the CEO, and for all shareholders. So I’m pretty happy about that one.

TWST: Do you look for companies with high insider ownership? Is that a criterion?

Mr. Geller: It’s not a criterion, but it certainly is a plus. We certainly gravitate toward that type of company. There is a point where it could turn into a negative, if insiders own so much stock that they view it as a semi-private company and don’t really care about what Wall Street thinks. So there is a point where it could actually become a negative, but for the most part high inside ownership is a very good attribute.

TWST: How about acquisitions, either being acquired or doing the acquiring, which happens a lot with small cap stocks? Does that come into your consideration at all when you select them?

Mr. Geller: Yes, absolutely. For a while throughout 2000 and 2001 we had a tremendous amount of buyout activity in our portfolios. Each one of our portfolios had a lot of companies that were bought out either by strategic or financial buyers, and that seems to have slowed down somewhat over the past year, because valuations have increased and financing has gotten a little more difficult. But we always look for stocks that have certain characteristics that would be attractive to an acquiror, such as strong profitability and strong free cash flow generation, which is the cash that’s going to go toward supporting the purchase price. On the flip side, we try to stay away from companies that are aggressive acquirors. All the research that we’ve looked at shows that companies that are aggressive acquirors tend to underperform the market. And actually, going back to the Landry’s story that I mentioned, I view that as their biggest risk right now. The company seems to be getting more aggressive on acquisitions, and that is a big concern for me right now.

This special Investing Strategies Report includes:

1) Kent G. Croft, President and Director at Croft-Leominster Inc., examines portfolio management strategies in this timely and deeply informative 4,000-word interview from The Wall Street Transcript.

2) Daniel D. McClure & Keith A. McLean, both Partners with I.G. Investment Management, Ltd., examine portfolio management strategies in this timely and deeply informative 5,400-word interview from The Wall Street Transcript.

3) Norman Gee, Senior Vice President and Senior Portfolio Manager at Freemont Investment Advisers, examines portfolio management strategies in this timely and deeply informative 2,700-word interview from The Wall Street Transcript.

4) David C. Jordan, Chief Investment Officer of First Bruce H. Geller, is Executive Vice President at Dalton, Greiner, Hartman, Maher & Company, examines portfolio management strategies in this timely and deeply informative 4,200-word interview from The Wall Street Transcript.