This week's Barron's interview is with the two managers of the Delafield Fund, a $480-million mutual fund applying the value style.
I frankly don't know these gentlemen or their fund. But there interview is a reminder that there are advantages to not-running multi-billion dollar portfolios -- though that's a problem I'd certainly like to have:
What kind of companies do you look to invest in?
Sellecchia: We are looking for misunderstood companies where, in
our view, we have identified a potential catalyst that hasn't been
priced into the stock -- and we think it can make the earnings power
step up and make this a company that could be perceived in a better
light. It doesn't have to be a very good company becoming a great
company. Normally those aren't the type of companies that we would have
in the portfolio, because their multiples are too rich for us. Instead,
we look for what could be an average company becoming better than
average, and the market will reward you as if the same rate of change
happened with a good company becoming a very good company.
Delafield: While we go across all spectrums and all sizes of
companies, it is highly unlikely that Vince or I are going to discover
a change taking place in Procter & Gamble that nobody else knows
about it or in Texas Instruments before somebody else knows about it.
But if you get down to a large middle-size company or a smaller company
-- and we spend a great deal of time with them -- you have time to
think about these companies, study them and consider everything, from
the board of directors to the control of the company to the management.
So there is a greater chance that we may perceive a change that is
taking place for the better before the rest of the world perceives that.
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