J. Jeffrey Auxier is President of Auxier Asset Management LLC and Founder of the Auxier Focus Fund. Prior to forming Auxier Asset Management in 1998, Mr. Auxier spent 16 years at Smith Barney — formerly Foster Marshall American Express, then Shearson — where he was on the Portfolio Management Advisory Board and the Chairman’s Council and was Senior Vice President of Investments and Senior Portfolio Management Director.

Mr. Auxier graduated with honors from the University of Oregon with a degree in finance and an emphasis on accounting. Mr. Auxier and his family choose to live far from the influence of Wall Street, on a hazelnut farm just outside of Portland, Oregon.

In this 3,938 word interview exclusive to the Wall Street Transcript, Mr. Auxier details his investment stance and current top picks for his investors.

“Our biggest position has been UnitedHealth (NYSE:UNH) since 2010. Our original basis is around $40, and that’s up, like $275. But we really like CVS (NYSE:CVS). We actually had Aetna, and then it was bought by CVS, and then with Express Scripts, that was bought out by Cigna (NYSE:CI). So we know that space fairly well.

And right now, if you look at CVS, it’s basically trading about nine times earnings for arguably one of the leading health care service providers. ”

He has reservations about some hot sectors:

“…My fear is that the cloud has been over-invested in right now. I think too much money has already gone into that. The capital spending in that space has been running now $40 billion, $50 billion, $60 billion over the last couple of years. So I think it could end up like fiber optic. It’s a great thing, but we tend to overdo it, especially when the money has been as cheap as it’s been.”

Get all the details on J. Jeffrey Auxier’s top portfolio picks and his insight into the 2019 market in the complete 3,938 word interview, only in the Wall Street Transcript.

Nancy Prial, CFA, is Co-Chief Executive Officer and Senior Portfolio Manager at Essex Investment Management Company. She is the portfolio manager for the micro, small and smid growth strategies, leading an all-women investment team. Earlier, she worked at Burridge Growth Partners as the Chief Investment Officer and Senior Vice President responsible for the smid and small-cap growth strategies. The Essex Small Cap Growth Strategy was launched and developed by Ms. Prial in 2001 while at Burridge.

In this exclusive 4,113 word interview, Ms. Prial makes the case for the micro-caps at this point in the economic cycle:

“We think both small and microcap is an interesting part of the market to be in, but we really think that the opportunity today in microcap is quite, quite compelling. Part of that is the fact that the microcap stocks have underperformed their small-cap brethren really since 2013. And so we’ve had now five years of fairly significant underperformance by microcap, within a market where small cap frankly has done pretty well. And so we think that that’s something that’s likely to reverse.”

Ms. Prial identifies some examples of her portfolio:

“..These are companies that can be reasonably in control of their own destiny, where a new product or a new area can really change the trajectory of the growth company, but many times, that improvement in their business is not yet fully recognized in the price of a stock. I’m going to talk about a really microcap name here; it’s called Identiv Inc. (NASDAQ:INVE), about an $80 million-market-cap, California-based company, so it’s a U.S.-based company.”

Another portfolio favorite is detailed by Ms. Prial:

I will mention one more microcap name that we think is particularly interesting right now. This one is a $95 million market cap, so again, very microcap. It’s a company called Tecogen (NASDAQ:TGEN), based in Massachusetts, so again a U.S.-based company. They’ve actually been around for a very long time.

They basically sell co-generation and chiller products.”

Read the entire 4,113 word interview to get the full investment rationale from Nancy Prial, Co-Chief Executive Officer and Senior Portfolio Manager at Essex Investment Management Company.

James Morton is Chief Investment Officer and a Portfolio Manager at Santa Lucia Asset Management Ltd. He has extensive expertise in recovering and small-cap companies, as well as emerging markets. Mr. Morton’s career in the investment industry began in 1985, and he was a subadviser to Mackenzie Cundill between 1996 and 2018.

He is an accomplished author, editor and investment columnist. Mr. Morton holds a degree in law from Trinity Hall, Cambridge University, and an M.A. in third-world economics as well as an MBA from Stanford University.

In this extensive and exclusive 6,835 word interview, James Morton discusses the Asian economic forecast and the stocks that will benefit.

“I think it’s interesting to comment on the dynamics in the political environment in the Asian part of the world compared to the U.S., North America and Europe. This will be quite a lively year — 2019 — since about 80% of the people in Asia who actually get to vote will be voting in the first half of the year. The most important of course being India, but Indonesia too. Also, Thailand looks like they’re finally going to have an election. And this has the potential to make a difference.”

This leads to some interesting picks.

“I’d like to start with West China Cement (HKG:2233). We like this industry because it’s been a story over the last couple of years of consolidation of market share within a circumscribed geographic area where cement plants compete. Consolidation has been driven by government policy to get companies to reduce pollution. That has been a big focus for the cement industry, and partly because of that, the government has not been pushing the industry so hard on pricing because they want them to invest in clean technology and upgrade their operations, and of course, that investment process caused smaller, less efficient, highly polluting plants to fall by the wayside. That led to significant market share concentration, with the result that margins in the industry have risen and the gross profit per ton is now in some places at the highest levels we’ve seen in recent history.”

To get the complete picture on this portfolio pick and many others from James Morton, read the entire 6,835 word interview in the Wall Street Transcript.

Peter H. Havens, Chairman, founded Baldwin Management, LLC in 1999 after being a member of the board of directors and Executive Vice President of The Bryn Mawr Trust Company. Previously, he organized and operated the family office of Kewanee Enterprises. He received a bachelor’s degree from Harvard College and an MBA from Columbia Business School.

In this exclusive 3,215 word interview in the Wall Street Transcript, Peter Havens runs down the list of his favorite stocks and gives the detail on why investors should take notice:

“The first one is Constellation Brands (NYSE:STZ). They’re one of the largest beverage companies in the world. Most people would know them for their beer brands. They are the exclusive importer of Modelo and Corona, two very popular Mexican brands they bring into the United States. They also have a wine business, which ranges from very inexpensive wines to some rather expensive wines.

And most recently, what has set them apart from the typical beverage business is they made a major investment in a company called Canopy Growth (NYSE:CGC), which is one of the largest of the marijuana growers in the world. They invested $4 billion in that to take a significant minority interest in the company with the right to expand, to take control of the company over the next few years.

Recently, the company reported their third-quarter earnings, and while they beat the Street on earnings and revenues, they guided down for the fourth quarter, primarily because of some softness in their less expensive wines and because of interest expenses on their Canopy Growth investment. The stock got hit pretty badly. Now trades at about $160 a share — that’s off from $227 a share not too terribly long ago. And so we think this is a terrific opportunity. The company is in good shape.”

To get all the rest of Peter Haven’s portfolio picks, read the entire 3,215 word interview in the Wall Street Transcript.

 

Frances E. Tuite, CFA, is a Portfolio Manager at Fairpointe Capital, LLC. She is part of the Investment Team, co-Portfolio Manager for the ESG Equity Strategy, and is responsible for investment research for both the ESG Equity and Mid-Cap Equity Strategies. In addition, she manages the 1837 LP long/short equity fund, which she founded in 2000.

Earlier, Ms. Tuite managed the 1837 Fund at RMB Capital and at Talon Asset Management — under the name Talon Opportunity Partners. Previously, she worked at Sirius Partners and Harris Associates as an analyst and portfolio manager, as a sellside research analyst at William Blair & Company, and as analyst and Director of Research at Johnson Investment Counsel. Earlier, she was employed at Procter & Gamble in their financial management training program.

Ms. Tuite received a BBA from the University of Cincinnati in finance and accounting and an MBA in finance and accountancy from Miami University in Oxford, Ohio. She passed the Certified Public Accountant examination. She is a member of the Chicago Finance Exchange, an organization for senior women leaders in finance, and a member of International Women Associates, which pursues global understanding and universal human rights. She is Chairman of the Steppenwolf’s Directors Circle and Board Chair for Recovery on Water, a nonprofit focused on breast cancer survivors.

In this exclusive 2,739 word interview, Ms. Tuite describes how her portfolio integrates ESG and high return stock picks:

“…The firm employs a bottom-up, valuation-based approach to investing. The ESG strategy that I’d like to focus on today really integrates that philosophy with analysis regarding ESG factors. ESG stands for environmental, social and governance. We integrate our investment process by evaluating companies on those criteria as well as looking at fundamentals. We have an internally focused research process that we use in the ESG strategy that combines the two.”

An example:

“A name that we added at the end of Q4 2018 is a company called Agilent Technologies (NYSE:A). They are in the health care sector and provide diagnostic and chemical analysis to life sciences and industrial companies. They also provide test equipment and consumables that help companies diagnose chemistries, whether it is an industrial, health care, academic or government agency.”

Ms.Tuite finds that other ESG investors are ignoring significant issues with many of their portfolio holdings:

“If you look at some of the offerings for ESG strategies, a lot of them are large-cap-focused and very diversified portfolios. Some of the companies we don’t really think are great ESG companies. If you look at a Facebook (NASDAQ:FB) or Amazon (NASDAQ:AMZN) that are part of these portfolios, they have some real issues. You have probably read the headlines regarding Facebook, but also look at Amazon. Its treatment of employees has caused a lot of unrest. Even Google (NASDAQ:GOOG) had some issues on the social side.”

To get more detail on this and many other ESG stock picks from Frances Tuite, read the entire 2,739 interview in the Wall Street Transcript.

 

                           

Christopher Faber is a Portfolio Manager at RMB Capital. He joined the firm in June 2017. Earlier, he was at IronBridge Capital Management, L.P., where he was Co-Founder, President, Strategy Head and Lead Portfolio Manager. He also worked at HOLT Value Associates, L.P., where he was Founding Partner.

Jeffrey Madden is a Portfolio Manager at RMB Capital. He joined the firm in June 2017. Earlier, he worked at IronBridge Capital Management, L.P., where he was a portfolio manager, and at Accenture, where he was a retail management consultant.

In this exclusive 3,302 word interview with the Wall Street Transcript, Mr. Faber and Mr. Madden reveal their in-depth small cap research methodology and some stocks that satisfy their demanding criteria.

“In the small-cap strategy, we look for small companies that have the potential to become very large companies. We’re looking for companies that are smart and healthy. We define smart as companies that allocate capital consistent with shareholder value creation. It’s measured by our CFROI — cash flow return on investment — life cycle and value creation framework that we developed at our previous firm, HOLT. We assess and identify healthy companies as those with high management skills, strong corporate culture, adaptability, candor and knowledge-building culture…”

One example in their portfolio:

“West Pharmaceutical Services (NYSE:WST) is a health care equipment company that has been in business since 1923. The company has remained in business for nearly a century given its strong competitive position as a critical provider for both containment and delivery systems of complex biologics, and it has 70% market share. The company is a supplier to the top 75 pharmaceutical and biotech injectable companies. Moreover, there are significant switching costs, as the FDA requires the same delivery system used in clinical trials after a therapy is approved.”

To get greater detail on this and other portfolio stocks for Christopher Faber and Jeffrey Madden, read the complete 3,302 word interview in the Wall Street Transcript.

Gregg T. Abella is a Co-Principal and Portfolio Manager at Investment Partners Asset Management. After graduating from Bowdoin College in 1992 with degrees in both economics and Spanish, he began his professional career at Chubb & Son in the International Division of the Surety Credit Department handling Latin America and Europe.

Mr. Abella subsequently held a number of positions with Chubb, ultimately establishing and managing the Guaranty Department for its subsidiary, Chubb do Brasil, in Sao Paulo, Brazil. His multinational experience and credit analysis skills bring a unique global perspective to the firm’s clients. Mr. Abella has earned the Accredited Investment Fiduciary — AIF — professional designation from Fiduciary 360 and has received formal training in investment fiduciary responsibility. He joined Investment Partners in 1998.

In this exclusive 3,586 word interview with the Wall Street Transcript, Mr. Abella details some opportunistic investments that make sense in this chaotic market.

“One fund in particular that we’ve been interested in is called CBRE Clarion Global Real Estate fund. The symbol’s IGR. It is a fund that basically invests in REITs, and REITs as an asset class, last year, like many asset classes, had a negative return. I think the North American REIT Index was down about 5%, and the global index for REITs was down almost double that.

When you have an asset class that hasn’t worked very well, sometimes in the closed-end fund space, the gap between net asset value and share price gets even more out of whack.

So toward the end of the year, on top of the fact that the asset class wasn’t popular, you had tax selling and a couple of other events all coming together at once, and at one point, this fund traded at a 19% discount to its underlying assets. And since it is an asset class that tends to pay dividends, this fund in particular was paying out a distribution rate that’s between dividends and return of capital on a monthly basis — at an annualized rate of 9%.”

To get more detail on this and other interesting trades from Mr. Abella’s portfolio, read the entire 3,586 word interview in the Wall Street Transcript.

 

Keith Chiasson is Senior Vice President, Downstream of Cenovus Energy Inc. Mr. Chiasson is responsible for optimizing the price Cenovus Energy receives for its products through marketing, transportation and refining. This includes all commercial activities associated with crude oil, diluent, natural gas, natural gas liquids and other hydrocarbon products produced or acquired by the company. Mr. Chiasson also manages Cenovus’ interest in its refining joint venture and is responsible for the Bruderheim rail terminal. In addition, he oversees supply chain management across the company’s operations. Mr. Chiasson joined Cenovus in 2016 to lead oil sands production operations. He’s a mechanical engineer with more than 20 years of experience in the oil industry, primarily with Imperial Oil and ExxonMobil.

In this exclusive 2,177 word interview with the Wall Street Transcript, Keith Chiasson demonstrates the complexity of managing both and oil and gas production company as well as the downstream refinery and shipping business.

“…We’re also a 50% owner in two refineries in the U.S., a joint interest owner with Phillips 66. Those refineries have refining capacity of 480,000 barrels a day, with a net to Cenovus of 240,000 barrels a day. And in 2015, we purchased the Bruderheim Energy Terminal, which is a crude-by-rail loading facility in Alberta, and it’s part of our strategy to create additional transport options for our products to capture global prices for our oil.”

Mr. Chiasson is proud of his company’s ability to deliver on its projections:

“Our number-one priority was to deleverage our balance sheet, which we’ve made significant progress on over the past year, and we’ll continue through 2019 reducing our net debt position. I think it’s very impressive when you think of a sustaining capital reduction of 70% from 2014 to 2018, and those costs are essentially locked in because it was structural changes to how we sustain that production.

And then also, being an industry leader in unit operating costs as well as SORs — steam-to-oil ratios — really positions the company well to take advantage as light heavy oil prices improve over time. This company has significant capability to generate free funds flow at commodity prices that we’re seeing today.”

Get the full 2,177 word interview in the Wall Street Transcript and get the complete, verbatim picture.

Anthony Marino, President and Chief Executive Officer of Vermilion Energy Inc., is an accomplished senior executive with a proven track record of high shareholder returns during his 36-year career in the energy industry. Mr. Marino joined Vermilion in 2012 as Chief Operating Officer, was named President in 2014 and Chief Executive Officer in 2016. He joined Vermilion’s board of directors in 2016. Prior to joining Vermilion, Mr. Marino held the position of President and Chief Executive Officer of Baytex Energy Corporation, after initially serving as Baytex’s Chief Operating Officer. Previously, Mr. Marino held the role of President & Chief Executive Officer of Dominion Exploration Canada Ltd., a division of Dominion Resources Inc.

In this exclusive 3,290 word interview in the Wall Street Transcript, Mr. Marino details the investment opportunities for his company:

“…We have always had a tremendous focus on capital efficiency. That is very important in a capital-intensive business like oil and gas. It allows us to pay a dividend and to grow the company with internally generated cash flow. So we end up with what I think is a very attractive equity security for investors: a monthly dividend, which has been increased four times over the history of the company and has never been reduced.”

The company has an unusual production footprint:

“…In 1997 we began what has been a very long and successful international diversification by becoming an oil producer in France, and we now dominate the domestic oil production industry there. We continued to grow and expand the company internationally by entering the Netherlands in 2004. We are now the second-largest gas-producing company in onshore Netherlands. We entered Australia in 2005 and Ireland in 2009. We now operate the gas field in Ireland that makes up almost all of Ireland’s domestic gas production. We listed on the NYSE in 2013, so now we’re interlisted, on the TSX and NYSE.

In 2014, we acquired production in Germany and in the United States in Wyoming. And over the last few years, from 2014 to 2017, we set up a business in central and Eastern Europe. We’re now the largest oil and gas landholder in Croatia, we produce in Hungary, and we’re the number-two landholder in Slovakia.”

This leads to pricing power that is rarely seen in the Oil & Gas sector:

“…Our European gas is extraordinarily high priced compared to North America. Today, the price for natural gas in Europe is about 2.5 times what it is in the United States, and it’s a very, very significant multiple of the gas price in Canada. So this is a real differentiating factor.”

To find out more about Anthony Marino and his unique oil & gas production strategy, read the entire 3,290 word interview in the Wall Street Transcript.

 

 

Noah Barrett is a Research Analyst at Janus Henderson Investors and lead on the firm’s energy and utilities research team. Prior to joining Janus in 2015, he served as Vice President with Institutional Capital LLC, specializing in analysis and stock recommendations for the energy and transportation sectors. Mr. Barrett’s experience also includes working as an equity research analyst with Fiduciary Management Associates LLC and as an associate in the credit risk management department at Morgan Stanley.

In this exclusive 3,072 word interview with the Wall Street Transcript, Noah Barrett reveals the investment recommendations he thinks will work best in 2019.  His analysis is based on a body of work from his team:

“One thing we pride ourselves on is doing a lot of in-depth, grassroots research, and we feel our edge is understanding the companies, their business models and management incentives better than our peers.”

The oil price for sustainable free cash flow has dropped, creating an opportunity for investors:

“Specific to the E&Ps, one thing that we’re focusing on are E&Ps that can deliver free cash flow at some reasonable oil price, and we define reasonable as $50 WTI. If companies can set their budgets at $50 WTI, grow production at some high-single-digit, low-double-digit rate while spending within cash flow and, more importantly, generating some excess cash flow, I think those companies will be rewarded in the market. Three to four years ago, you’d be surprised if any U.S. onshore E&P could generate free cash flow at $50 WTI, but I do think there are some companies today that can actually deliver on that promise.”

One pick among many is EOG:

“In E&P, my favorite name is EOG Resources (NYSE:EOG). It’s always been viewed as a best-in-class E&P and, as a result, has usually traded at a notable multiple premium to its peer group. Recently, that relative premium has compressed quite a bit, and I see an attractive entry point to buy a best-in-class E&P that’s trading at a slight premium to peers versus its historical average. We like a lot of things about EOG, including its strong track record of operation excellence and the company’s differentiated culture.”

To get all the picks, and Noah Barrett’s complete picture of the Oil & Gas Sector, read the entire 3,072 word interview in the Wall Street Transcrpt.

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