You're watching...
Clearbridge Advisors Portfolio Manager Brian Angerame on why U.S. mid-cap stocks provide investors growth with much less risk than investments in emer...
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
Ronnie he has about 16% of -- -- speaking of which and financial the financial financials.
As story just said he says forget about chasing growth in emerging markets that really should be looking in your own backyard to -- best.
Exactly.
My I'm sympathetic with investors -- to -- to chase after growth -- end up the returns in their portfolio but to do so you're seeing a lot of flows into.
Emerging markets higher risk areas whether it's high yield emerging market -- emerging market equities.
In -- really wished that they would first look in their own backyard here in the US.
In specifically -- mid cap stocks.
Because of their I think I would argue that there is as much growth in innovation here as there is overseas -- we're doing it with much more transparency and.
In less risks now to -- two -- -- -- core.
And midcap growth over yet clear -- advisors and and it just appears that the big cap growth is looking just a little bit but it is that the court it's looking better but the cap core yes but they're they're both in doing doing -- -- I see there's some overlap in -- in some of your most.
The widely -- trades and if so as we look at these what do you use as your important metrics would you are picking assure -- -- -- cash -- investors were balance sheet investors and -- capital discipline investors and so.
Those being that sort of lowest common denominator to the stocks -- that we like to invest in.
In mid caps thankfully we can find of those characteristics of companies in because -- mid caps to you don't have a lot of the the same attention.
That is that is set placed upon a large caps and so we can do so and find really miss priced stocks that that few people are paying for.
-- I wanna explain to our viewers something and and the way Brian does this as he tries to find the kind of stop people likes but then you go for the big cat person so -- -- a little comparison for example between a large cap name and then a mid cap name that you would choose over the big name.
Yet so.
Let's take in technology take IBM right everybody loves IBM and they've done a wonderful job over the last well last fifty years but.
But a wonderful job even over the last three to four years taking there revenue mix from.
Software.
-- from hardware to software and in service -- right and the market cap of the company has nearly doubled during that timeframe.
So but but IBM's not sneaking up on anybody you know -- -- that there's growth there but as well on the steps of which any take a company like checkpoint checkpoint software which is and that the security business they sell hardware software and services.
They're protect your enterprise data rates -- its fire walls and then be -- and they sent -- 4% so Grasso and so that that stock has been beaten up here.
No one's really paying attention it's an eleven billion dollar company in a very very fast.
Segment of the technology sector in for an eleven million dollar company they have three billion dollars in cash on the balance sheet and so we think that prospects for checkpoint at great well.
And -- point to make about the mid caps is that.
These are that he used a perfect example you heard him say it sneaking up on you here wants the positive story to sneak up on other investors but you're in their right behind creeping along -- so why is that is that that analysts get this wrong get the story wrong oftentimes of that.
In -- way boats if you're comparing to both large and small cap the better balance sheets of the small cap.
Yes so they have better balance sheets she's a better cash flow more consistent cash -- small caps on little bit less volatility but vs the large caps right.
Mean everybody loves Procter & Gamble and IBM but they're not gonna surprise you emission growth significantly above expectations whereas.
If they're only few people paying attention to and enersys -- solution or you know these are companies that can be at times grossly -- priced and that's where we're spending our time.
-- coming up to name three names that he just super much very much likes these names coming up so.
