Peter Dixon is a Sector Leader and Portfolio Manager at Fidelity Management & Research Company — FMR Co. — the investment adviser for Fidelity’s family of mutual funds. In this exclusive interview with the Wall Street Transcript, Mr. Dixon details many of his top portfolio picks, including Nike (NYSE:NKE).
“NIKE (NYSE:NKE) is one. And if you think about it, at the time I decided to own Nike, not only does it have exposure to the athletic category — people want to live more active lives in terms of health and wellness. This is a big long-term trend. Nike is obviously an athletic-focused company, and then from a brands perspective, Nike is very much brands-focused.”
The award winning stock picker goes on to explain how he identifies superior investment opportunities:
“I’m looking for very long-term earnings growth, and I look for both brands and categories. I look for brands that are growing in popularity with consumers, and that’s a little bit more of a one-off approach through the sector. But also, from a category perspective, the categories that I expect to grow the fastest.”
The vast array of consumer discretionary stocks could prevent serious stock analysis by investors, but this expert has created a discrete set of criteria that singles out the upside to certain stocks. One of these criteria is a bias towards large cap consumer stocks”
“TWST: Yes, please explain that tendency toward large cap.
Mr. Dixon: If you think about the scale and network effects of being a big company in a sector selling things that people don’t need, but they want — an example would be, say you want to start an athletic shoe company, and you want to hire the five most famous NBA players to wear your brand. Think about the check you’d have to write to those players. Now, think about if you are a very large athletic sneaker company that had tens of billions of dollars in sales, you could easily spend a lot of money to hire or to promote your product.”
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