Mark Madsen Makes the Grandeur Peak Global Contrarian Fund (GPGCX) His Family Fund

December 23, 2020

Mark Madsen, CFA, MAcc is a Portfolio Manager of the Grandeur Peak Global Reach Fund (GPROX) and the Grandeur Peak Global Contrarian Fund (GPGCX), and Guardian Portfolio Manager of the Grandeur Peak International Opportunities Fund (GPIOX).

He is also a Sr. Research Analyst with a specialty focus on the industrials, energy and materials sectors globally.

Mr. Madsen joined Grandeur Peak in 2016 following four years working as a Senior Equity Analyst in a family office. Mr. Madsen has been a research analyst since 2004, when he began his career at Wasatch Advisors.

Mr. Madsen began as a junior analyst and was later promoted to a senior research analyst, working on the Wasatch Small Cap Value Fund (WMCVX). He developed an expertise in the energy, industrials and financial sectors.

After four years, Mr. Madsen left Wasatch to found Red Desert Capital in Las Vegas, Nevada. As Founder and Portfolio Manager, Mr. Madsen successfully launched a concentrated portfolio based on a bottom-up fundamental value investment strategy. He was later recruited by a client to manage a family office in St. George, Utah.

As the Chief Investment Officer, he developed an all-cap equity portfolio, managed an income portfolio and was responsible for tracking and evaluating third-party managed accounts.

In this 2,467 word interview, exclusively in the Wall Street Transcript, the Grandeur Peak portfolio manager puts his spin on stcok picking, with many in detail:

“The Global Contrarian Fund is more of a value-based fund, so we’re looking for high-quality companies that are trading at a really attractive valuation.

Oftentimes, they’re trading cheaply either because they’re undiscovered and nobody knows about them, or they’re undervalued because of current market conditions. And because they might have hit a bump in the road that’s either company specific, or related to more of a macro-based factor…

…We want to make bets on companies that are, again, high quality and have great long-term prospects. And we’re willing to be patient and own those companies even if in the current environment that business is not doing particularly well at the moment.

So we’re hoping to find companies that are trading at a cheap valuation. And we think that means that the market has missed something, and so we are willing to make a bet when perhaps somebody else isn’t.”

“One example of a company that we like is an IP and patent firm in Australia called QANTM Intellectual Property (ASX:QIP). And QANTM is the second largest player in the patent market in Australia. And it is a more recent name.

…Another one of the names we like that is listed in Hong Kong is Plover Bay (HKG:1523).

Plover Bay specializes in making hardware and software, in SD-WAN — products that enable customers to aggregate different sources of bandwidth into one stream of bandwidth — and that’s called SD-WAN technology.

We think the company has a bright future as 5G is rolled out globally. So there’ll be more and more uses for its products.

And we like that the company is 80% or 75% owned by its founder. It’s continuing to grow at a healthy rate, but also at the same time it pays out a really healthy dividend yield.

One of the companies that we’ve done really well with in Vietnam is called Hoa Phat Group (HOSE:HPG). Hoa Phat produces steel. They make a wide range of steel products. And there’s been a voracious appetite for steel within Vietnam.

So the company has built out new manufacturing centers and new infrastructure within the country. And Hoa Phat expanded its capacity over time, but that capacity has readily been absorbed by the market.

The stock has always traded at a really reasonable multiple and we also like that despite the fact that it’s growing really fast, it has done a good job of also paying a dividend and returning some cash to shareholders over time.”

Get the complete detail from Mark Madsen of Grandeur Peak for these and others by reading the entire 2,467 word interview, exclusively in the Wall Street Transcript.