Randy Watts is the Chief Investment Strategist at William O’Neil + Co. Inc. With more than 25 years of equity asset management experience, Mr. Watts has a specific focus on large- and small-cap growth stocks. He started his career as an Equity Analyst at Freedom Capital Management in Boston, before spending nine years at Westfield Capital Management as an Equity Analyst and then as a Partner and Portfolio Manager overseeing a $500-plus million growth stock portfolio. While at The Boston Company, Mr. Watts was a Senior Managing Director with responsibility for small- and midcap growth investments. He managed $4 billion in long and long/short equity portfolios and hired, trained and managed a team of investment professionals.
In this exclusive interview with the Wall Street Transcript, Mr. Watts details his firm’s investing philosophy: We “would say both as part of the William O’Neil philosophy and as part of my own personal philosophy in investing and in life, there’s nothing new under the sun. So one of the reasons this methodology works is because investors’ patterns of behavior repeat themselves over history. And in addition, innovations, new products, new industries, etc., those have always existed. There are always new products and new companies and new industries coming into being that offer great investment opportunities. And so I think by studying what’s worked in the past and then also trying to identify investments with those same kinds of catalysts and drivers today, I think that offers an attractive and profitable way to invest.”
In the full interview, Randy Watts details many stocks in the full interview. “…One stock we find interesting that’s kind of fun to talk about is a U.S. restaurant company called Wingstop (NASDAQ:WING). They own and franchise cooked-to-order chicken wings. And they’ve got currently, I believe, 1,088 restaurants in eight countries. That includes 994 U.S.-based restaurants, of which 971 are franchised and 23 are company-owned. Outside the U.S., they have 94 franchised restaurants in seven countries.”
“The way their revenue currently breaks down is they get about 63% of their revenue from royalty revenue and franchise fees and about 37% of revenue from their own company-owned stores. They are more focused on takeout than dine-in, so most of their business is driven by take-away. They are, we think, one of the faster-growing restaurant brands in the United States. They have recently reported a quarter which we thought was strong. They had strong same-store sales that came in over 4%. They think, this year, that they’re going to be able to expand their units in the low teens, so kind of 13% to 15% with positive same-store sales and earnings growing north of 20%. So we think the earnings growth can be in the 20% to 25% range.”