Michelle Stevens, CFA, is Senior Portfolio Manager and Managing Director at Baird Equity Asset Management. Ms. Stevens has 22 years of investment industry experience, having managed mutual funds, subadvised funds and institutional separate accounts in the small, small/mid — smid — and all-cap value equity disciplines. In this exclusive 3,358 word interview in the Wall Street Transcript, Michelle Stevens details her investing philosophy and current top picks for investors.
“Our process, just to go a little bit further, is to identify good companies mispriced by the market. We like businesses that have high returns on equity and a solid earnings growth profile. We believe that companies with high returns through the market cycle indicate that they have some sort of competitive advantage or high barriers to entry. So we like those types of businesses, but we’re very true to our value discipline. In that regard, we’re not willing to pay a premium for those businesses based upon their growth rates. So to do that, we’re always seeking companies where we believe there is what we call a predictable surprise — that is, a catalyst for earnings surprise — and then ultimately p/e multiple expansion.”
Ms. Stevens goes into detail on several of her current top portfolio picks:
“Just to give you an example, one of the names in the portfolio is a company called Cypress Semiconductor (NASDAQ:CY). This is a business that’s really been transformed over the last three years. They completed three large transactions that changed the business from more commodity-related semiconductor chips to a focus on much higher growth areas of the market with better margins. They’re now number one in a lot of auto categories where we’re seeing double-digit growth…They’re also number one in things related to the connected car, like Wi-Fi, Bluetooth and touch screen.”
Read the entire 3,358 word interview in the Wall Street Transcript to get the full detail and more top picks from Michelle Stevens of Baird Equity Asset Management.
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