Joel D. Hirsh, CFA, is a Principal, Portfolio Manager and Co-Chief Investment Officer at Kovitz Investment Group. He is responsible for leading the firm’s equity research process as well as developing portfolio construction for KIG’s Core Equity and Hedged Equity strategies. Kovitz subadvises Absolute Capital Opportunities Fund (MUTF:CAPOX) for which Mr. Hirsh is a co-portfolio manager.
In this 3,279 word interview exclusively with the Wall Street Transcript, this highly successful portfolio manager reveals the reasoning behind his top picks:
“What’s interesting about Quanta is they grew mostly through M&A to be of a size that they are significantly better positioned than the companies they compete with. And as the company has evolved, they’re pretty well misunderstood.
They had a couple of years where earnings were not smooth because large transmission projects got delayed for regulatory purposes, but the base business continued to grow very nicely. And at this point, we estimate that 80% of their earnings is base business, and that is a very high-quality recurring type of business.”
The portfolio manager identifies other stocks with the same potential to out-perform the market in the near term and the far term:
“They’re about double the size of Expedia (NASDAQ:EXPE). And it’s really an oligopoly between Booking and Expedia.
And they’ve been a very rational oligopoly in terms of competing for traffic. They primarily distinguish themselves by the number of rooms available, the number of alternative accommodations available and the ease of use of their app and online presence.
And so in our opinion, once you’re getting about half of your traffic organically, you’ve definitely arrived, and Booking definitely has. They’re generally considered by a wide margin the best operator in the space.”
Get the complete picture on these and other stocks in the portfolio by reading the entire 3,279 word interview exclusively with the Wall Street Transcript.
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