David Nadel, Portfolio Manager and Principal, joined Royce & Associates in 2006. Previously, Mr. Nadel was a Senior Portfolio Manager at Neuberger Berman from 2004 to 2006, and a Senior Analyst at Pequot Capital Management from 2001 to 2003. He was also named to the 1999 and 2000 Institutional Investor All-American Research Teams.
One of David Nadel’s top picks is a medical device manufacturer based in Australia. “Cochlear (ASX:COH) is from Australia, which Mark and I visited together in June, in part because they have not had a recession for 25 years, and also because since 1900, the total return of the Australian equity market has been about double that of the U.S. Incidentally, a big part of that superior Australian return has been dividends. Australian companies are much more generous with dividends than your readers will be used to here.
Cochlear is the world leader in cochlear implants, with about a 65% global market share.”
Mr. Nadel goes into detail on a number of other top picks and bangs the table for Swiss based stocks in particular: “…there’s probably no higher-quality corporate market in the world. Switzerland just oozes quality. From large caps all the way down to small caps, there is an upstanding corporate culture there and a history of value creation.”
On the other side, David Nadel is completely sour on commodity based businesses: “I have tried to learn from the best, and the teachings of Michael Porter, of Warren Buffett, of Robert Novy-Marx all underscore what problematic long-term investments commodities tend to be. Remember that equity returns are driven largely by dividends, and commodities offer no yield. The Economist’s commodity index has had a return of around zero since it was launched in the 1870s. That’s 150 years of zero.”
Read the entire transcript of the exclusive interview to get a full review of all the detailed stock winners from David Nadel.