Bobby Edgerton Sums Up His 42 Years of Investing Experience: “For Long-Term Gains, Buy When Others Sell”

March 14, 2022
Bobby Edgerton is the co-founder of the Capital Investment Companies

Bobby Edgerton, Co-Founder, Capital Investment Companies

Bobby Edgerton is a Co-Founder of the Capital Investment Companies and has served as an executive officer of the companies since 1984.

He is also the firm’s Chief Investment Officer and has been in the financial services industry since 1979.

After winning the North Carolina State High School Golf Championship, Mr. Edgerton accepted both a basketball and golf scholarship from Wake Forest University and graduated with a B.A. in business and finance.

After graduation, he attained a rank of First Lieutenant in the U.S. Army Signal Corps, where he commanded a thousand-man training company at Fort Gordon, Georgia, during the Vietnam War. During his amateur golf career, Mr. Edgerton played in four United States Amateur Championships.

In this 2,294 word interview, exclusively in the Wall Street Transcript, Mr. Edgerton details his current buy list.

“…In my 20s, I became interested in the stock market. I wanted to be self-sufficient and financially independent. And I figured if you could master the stock market, per se, and you could make enough money and become wealthy before your time.

So you didn’t have to be dependent on anyone, and you didn’t have to work if you didn’t want to.

So I started following the stock market and saw how many mistakes the big institutions would make consistently, and how stocks had these wild fluctuations up and down. And if you just buy when they’re down, buy when everybody else is selling, that would be a key to doing well…

It’s about time interest rates started tracing back up to some normal level. I think low interest rates really benefit the rich, because they can borrow money cheap and go public cheap, but it doesn’t really help the lower half of the population where most are not so much into the stock market as maybe others, and over time are putting their money into CDs in the bank and getting a decent yield.

But they’re getting virtually nothing now for the last four or five years, which is kind of sad.”

The long term vision of Bobby Edgerton has reward his investors:

I bought Apple in 1995 when Jobs was released — that is, fired — from Apple and John Sculley had come in. So Jobs was fired, and the stock went way down, and everybody was talking about Apple going broke.

Yet back in 1995, they had $1.3 billion in cash and the debt was only $300 million, and everybody loved the Mac and hated IBM (NYSE:IBM).

IBM had lost money for four years in a row. So my instincts told me that if you bought Apple when everybody else was selling it, you probably had a good chance at making money.

And following my instincts we actually bought 500 shares and the stock split two for one.

So I had 1,000. Then, two for one again, I had 2,000. And seven for one, 14,000. And four for one and had 56,000 shares, and I only started out at 500.

So, you know, I got lucky. Jobs came back and the rest is history.”

Bobby Edgerton’s current picks include a defense contractor and a newspaper publisher:

“My number-one stock is a company called Aerojet Rocketdyne (NYSE:AJRD).

Aerojet Rocketdyne was formed back in the 1940s. Their CEO back then owned General Tire Company (OTCMKTS:CTTAY), which had a lot to do with helping us in World War II.

But he saw how important rocketry and rocket technology in space was going to be.

So he sold the tire business and started Aerojet Rocketdyne. And back in the early 1950s, he bought about 12,000 acres of land, 15 miles from downtown Sacramento. And they still own it.

And right now it’s an insanely cheap stock. Here’s a company that has $620 million in cash and debt is $500 million, so more cash than debt. And there’s no telling what that real estate is worth.

And it was Aerojet that really essentially put Neil Armstrong and Buzz Aldrin and Michael Thompson on the moon.

Michael Thompson was the pilot of the ship, but he didn’t get to fly to the moon.

Currently, Lockheed Martin (NYSE:LMT) has made a $56 a share offer as we speak this morning, but they have officially terminated that offer, due to the FTC assuming it would harm rival defense contractors and further consolidate multiple markets critical to national security and defense.

This is the agency’s first litigated defense merger challenge in decades. So you can buy the stock at $37 and can figure Lockheed Martin has done a lot of the homework for you. They’re a very smart company. And that’s what I’m going to buy some more of this morning. It’s my number-one buy.

And maybe my number-two buy is The New York Times (NYSE:NYT).

The New York Times fell on kind of hard times back in 2012. They had a CEO who borrowed a lot of money, bought The Boston Globe, and bought part of the Boston Red Sox.

They also sold part of The New York Times building.

Then they hired Mark Thompson. He had never run a company before, he was the head of the BBC. He solidified the company, paid off every penny of debt, got the cash up, and no debt. Once he got the job done, he then retired.

And in walks Meredith Kopit Levien who began reading The New York Times when she was in high school in Richmond.

She went to UVA and became a star at The Cavalier Daily. She also shined at a famous consultancy run by David Bradley up in D.C. And she was also a star at Forbes, getting Forbes out of so much print and into more online digital subscriptions.

So The New York Times brought her in. And now she’s the CEO there. And personally, I would vote for her for president if she could run.

So The New York Times is now valued at about $7 billion but it’s worth a lot more than that. They still own 53% of The New York Times building.

And the stock is just numerically down. They now have 10 million subscribers, the majority of which are digital. And she’s doing a lot of interesting things — specialty apps on the web, like cooking and sports, and more.

And so, both of those stocks have been trading at around $40. Today, The Times is about $42 and Aerojet Rocketdyne is $37 and change. So you get all that real estate outside Sacramento, they have 12,000 acres. So they have about 8% of the land that Raleigh has in the whole city.”

Get the full 2,294 word interview with Bobby Edgerton, exclusively in the Wall Street Transcript, including all his current stock picks and more, exclusively in the Wall Street Transcript.