Christopher Faber is a Portfolio Manager at RMB Capital. He joined the firm in June 2017. Earlier, he was at IronBridge Capital Management, L.P., where he was Co-Founder, President, Strategy Head and Lead Portfolio Manager. He also worked at HOLT Value Associates, L.P., where he was Founding Partner.
Jeffrey Madden is a Portfolio Manager at RMB Capital. He joined the firm in June 2017. Earlier, he worked at IronBridge Capital Management, L.P., where he was a portfolio manager, and at Accenture, where he was a retail management consultant.
In this exclusive 3,302 word interview with the Wall Street Transcript, Mr. Faber and Mr. Madden reveal their in-depth small cap research methodology and some stocks that satisfy their demanding criteria.
“In the small-cap strategy, we look for small companies that have the potential to become very large companies. We’re looking for companies that are smart and healthy. We define smart as companies that allocate capital consistent with shareholder value creation. It’s measured by our CFROI — cash flow return on investment — life cycle and value creation framework that we developed at our previous firm, HOLT. We assess and identify healthy companies as those with high management skills, strong corporate culture, adaptability, candor and knowledge-building culture…”
One example in their portfolio:
“West Pharmaceutical Services (NYSE:WST) is a health care equipment company that has been in business since 1923. The company has remained in business for nearly a century given its strong competitive position as a critical provider for both containment and delivery systems of complex biologics, and it has 70% market share. The company is a supplier to the top 75 pharmaceutical and biotech injectable companies. Moreover, there are significant switching costs, as the FDA requires the same delivery system used in clinical trials after a therapy is approved.”
To get greater detail on this and other portfolio stocks for Christopher Faber and Jeffrey Madden, read the complete 3,302 word interview in the Wall Street Transcript.
Analyst Q&A: Finding a Recession-Proof Sweet Spot
December 31, 2009