Discussing why tech stocks could become among the top value trades in 2012, with Matthew Lamphier, First Eagle US Value Fund.
GrizzlyRock Value Partners was up 16.6% for the first quarter, compared to the S&P 500's 5.77% gain and the Russell 2000's 12.44% return. GrizzlyRock's long return was 22.3% gross, while its short return was -2.9% gross. Compared to the Russell 2000, the fund's long portfolio delivered alpha of 10.8%, while its short portfolio delivered alpha Read More
top of the hour. matthew lampiere had a good year in 2011.he’s looking to the tech sector this year to find value and hejoins us now with more and more pic picks. great to have you with us. your biggest holdings is cisco. we had a small stake, but it was really this year we bought $600 million worth of the stock. although the stock is off from maybe 100 down to 19 i think our base is 16. what do you like about it now? what’s changed in the time period in which you actually increased your stake? it’s really just been valuation. the stock has come from 100 times earnings down to under 10 if you adjust for the cash, so it’s really a valuation. the balance sheet is net cash, and then we think the management team is rational as well. there’s a lot of cheap stocks out there right now, certainly the financial sector is one. where do you see the bets to be placed because obviously last year there was a lot of cheap stocks out there, too, and you did pretty well. yeah. you know, we have a lot of ithink large cap tech is a focus for us. we own microsoft, cisco, and in intel, also linear technologies, texas instruments. we do own a number of financials, although not the typical kind of large money center banks. we old a couple regionals, u.s. bank corp, american express, visa, and mastercard, and, you know, we own conocophillips as well, 3m. typically larger cap stocks have wagged the mid and smaller. you must look for unlovedareas. would you ever venture into the home building space at all? we’ve looked at the home builders. we’re value guys so we care about the balance sheet and management and reasonable businesses. we haven’t found — we’ve looked and scrubbed those things a number of times, just unable to kind of piece together, you know, whether we can avoid kind of permanent impairments of capital which is what we’re focused on. for the home buildings for now, we have scrubbed them a number of times. we try to stay humble and look at it a number of times at a number of different price points but nothing as of yet. matthew, thanks for coming by. hope to see you back here soon. let’s hit some options action right now and brian is taking a
H/T: Canadian Value