Brian Laks, CFA, is a Research Analyst at Old West Investment Management, LLC. He is a member of the Portfolio Management Team and Old West Investment Committee. Prior to joining Old West, Mr. Laks was a research analyst at NWQ, an affiliate of Nuveen Investments. He earned his undergraduate degree and MBA from the Marshall School of Business at the University of Southern California.
In this exclusive interview with the Wall Street Transcript, Brian Laks explains the inception of their investment philosophy: “…We manage about $200 million across a few different strategies, and our philosophy focuses a lot on people. We look at insider transactions and insider ownership, and also follow a number of investors with great track records. If we can find a company that has significant insider ownership where insiders have recently been buying, and it’s owned by a number of smart investors, that’s usually a good starting point for us to begin a more traditional value analysis.”
The insider trading activity is used as an indicator of significant inflection points. For example, an investment in Enphase Energy (NASDAQ:ENPH) created an opportunity for the portfolio manager. “And so in January of 2017, we saw just that. There was a large strategic investment from T.J. Rodgers, who was the Founder and former CEO of Cypress Semiconductor (NASDAQ:CY), and as part of the investment, he was appointed to the board of directors. He has a long history in the technology industry. He founded Cypress in 1982 and grew it into a multibillion-dollar company before he retired in 2016. He also had experience in the solar industry as Chairman of SunPower (NASDAQ:SPWR) during its IPO. So he comes on, brings in consultants from McKinsey who he had worked with before, and they started to grapple with some of these cost issues and essentially initiated a companywide restructuring.”
To see more examples of this type of innovative stock picking read the entire interview in the Wall Street Transcript.