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Stocks can sometimes be risky but we've got a money manager who says he picked the right ones you can see big gains and joining us now is that -- heartland value plus fund portfolio.
Manager Adam -- levity came chock full of names let's get right to it Kaiser Aluminum.
Among other things they make this -- on airplanes why do you like Kaiser Aluminum.
We'll -- -- is like any other company in the heartland value plus general differ Cummings -- great balance sheets attractive valuations and improving fundamentals.
These guys have to measure and markets aerospace and autos in the last -- they just reported a couple weeks ago.
Airspace sales are up 35% auto sales -- 125%.
We expect those fundamentals to continue for the long term.
As we see commercial build rates in aerospace -- at running a double digits for number of years.
And cafe standards -- -- raise mile per gallon averages in cars will drive more aluminum into cars -- deal.
And then -- and it's attractively valued its.
Yet -- it's trading at ten times earnings and five times cash flow one times book value with a nice dividend yield.
What are your other -- associated Banc court this pretty much contrary -- -- do you like us want.
Well at at heartland heartland funds we are true dyed in the -- contrarian and no one likes -- -- -- -- -- the banks why well.
Credit has been a problem the last number years and loans have been growing you look at bank like associated.
Their credit has improved 75% since the peak.
Nonperforming loans are down 33% over the last year and they -- on the loan book for the last six quarters straight and their forecasting loans to grow.
3% sequentially from the rest of the year.
But that does sound -- album very attractive that doesn't sound like a very big number loan growth at 3% that's impressive do you.
Well 3% per quarter so that that you and realize that it's a double digit growth rate.
And you look at their valuation it's trading that point 85 times book value you go back for its entire history of -- an average of one point five times.
So significantly undervalued okay where we're all -- we got aluminum we -- we get the banking sector and retailers you like Fred's discount retailer.
-- -- -- Well if you compare -- to the competition it's significantly undervalued -- trades at about five times discounted cash flows.
Vs the company's -- ten times and the new management team has.
Fundamentally been improving the business if you look at their operating margins in 2008 there one point 5% we estimate -- be 3% this year so it's a doubling over the last few years.
And they're driving more customers in the store by refurbishing -- majority -- stores putting pharmacies and their stores and bringing in brand names.
Are right at a -- thanks so much heartland value plus fund portfolio manager we appreciate your time good ideas thanks.
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