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GAMCO Associate Portfolio Manager Lawrence Haverty on strategies to boost investors’ portfolio.
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If you can't think some Irish today -- a 46 of the S&P 500 hitting all time highs but.
Certain media stocks have been doing beautifully the entire year earlier this week.
And then this is what got us thinking about this Mario Gabelli one of our favorites told us about his best performing fund.
But the belly multi media trust.
So we pointed out it's up 25%.
Over the past year.
So impressive that we several let's bring in the portfolio managers.
And Larry have -- is one of -- he joins me now in the Fox Business exclusive and while everybody's -- up about the month of January you've been doing beautifully for the entire year.
Well actually it's been from the the bottom of the market lists were up I think about 24% compounds.
Kerr from in the last four years and in what what's happened is.
We're lucky we we which beats being Smart we investing grade industry's technology is basically causing people to consume more and more media.
The company's figuring out a way to collect revenue for this that this valuations are reasonable the cash flows are -- the companies have been responsible.
Alec haters of capital it's almost a perfect storm on the positive side.
Okay do you have what what you just articulated to me is extremely important because you said we're just mine very good companies.
And being lucky is being Smart.
It's not that hard to do folks if you look at the quality companies through good times and bad through all the worries about Greece and Portugal and Spain and everybody looking at the -- -- which is a mean have nothing to do with anything here.
These companies have done.
Beautifully but let's pull out some of your best in your favorites in your widely held here.
And among them some of them to me are very interesting because you've got some gamers and here.
And that is of particular play on the Asian gaming picture is is just the Macau story once again.
If it's AG in general Macau was Singapore were Vietnam's going to open up the Philippines are going to open up.
We think at some point eight gaming it's gonna take place in Japan in -- the folks in Asia just haven't incredible proclivity to gain.
And this has been paired with just incredibly responsible policy.
At the government and the planners and lately our offer -- the planners and account I don't brighten the the planners and Singapore got it right.
They had different ambitions but they've arranged for the intelligent expansion of gaming.
It's -- non polluting industries it's helped the tourism industry it's led to phenomenal increases in employment.
And the GDP of Mattel I think -- gaming is.
Been.
-- there and substance over 12% compound is.
This though an industry that depends very much in part on the high rollers and that would then depend on the economies of some of these emerging markets remaining -- stable and growing of course.
Well it -- there were 22 forms there's the high rollers and and in the mass market and the mass markets pretty high and you go into these casinos at nighttime it's very hard to find table under 25 dollars and these people like tables they don't like to play slots so you've -- I have to ask you go there and you look at each of these and and you watch the action there are -- -- James Bond movie the worst of the worst baccarat play -- -- planet I think I've lost my last nine games which is set.
One half -- one of our times nine one very hard I won't even play the penny -- segment you know.
Forget it but -- when you are looking because you've been so cautious -- Smart.
With a little thrown in when you're looking to commit money to a certain stock to put in the fund what are the things that you before.
Well we look for for basically businesses that grow.
Especially business is -- -- -- actually businesses that generate cash week we'd likely the cash to come out.
Sometime or other a good example of -- business we don't like is Amazon cash never comes -- the bottom suspect it.
Third thing is we'd like businesses that erect barriers to entry.
If you look at -- Macau is an example.
The government says they're gonna be six concession -- that's an absolute barrier to entry no one else is -- to other than the six concessionary soap and that's how we look at you know say for example at -- I'm not just bringing this up for bringing it up because it's been a strong stock -- that's News Corp.
the parent of our network.
Along with a bunch of others that you on DirecTV and Time Warner which don't CNN so we're being fair and balanced here but.
A Time Warner -- 32% Europe for -- News Corp.
up 43%.
Europe for here how.
How -- -- -- well what you got in both of these companies in for for different reasons was that responsible -- capital allocation.
For Time Warner first thing Jeff.
Bewkes did when he came in was make -- bad acquisition be about 750 million dollars.
Almost instantaneously down the -- since then no bad acquisitions.
A lot of share repurchase -- big help from technology and things like HBO go.
And -- the combination slow and steady cash flow growth tremendous free cash flow generation.
Purchasing stock raising the dividend just a wonderful recipe if you deodorant the business now here's our call here making you -- everybody listening apple all you apple lovers a faithful that the stock price has the potential to double.
In what timeframe and what would get that there well I think what gets -- there is is really easy and the time -- harder because you just don't know when it's gonna come.
But it's basically responsible capital allocation by the board to they have a lot of cash there's 137 billion by now -- a month into the next in the the next quarter there's easily -- 140 billion of cash there.
It's the shareholders -- -- it's not management's.
It's not the board's.
It one way or another has got to come back to the shareholders when that happens and if they start running their business.
Like John Malone in most of his industries runs his business like Time Warner did like news -- running it right now.
The stock is gonna go from -- five multiple which is way way well for a company of Apple's business quality.
To if you can -- -- Time Warner multiple I I double in the stock price.
Well that would be 900 dollars -- point around them so he believes everybody listen here it could go to 900 if they put that cash to work what if they're forced to.
Quickly through a shareholder lawsuit -- the saying what you do with all this money you're not acquiring companies.
I just that was astonished that there was no special dividend in the fourth quarter right guy got special dividends from win in Las Vegas Sands and a lot of other companies and apple was the most logical we didn't get that they've been I I don't know what the board's thinking what its -- -- to -- -- it maybe they'll be pressured by someone in court knows -- you Larry -- pretty good to see slot we come back up.
Absolutely love having you here Larry -- belly multimedia trust associate portfolio manager.
