Portfolio Manager Perspectives

Jeff Benjamin

Joel Hirsh: In equities, big and boring is best

Dec 6, 2009 @ 12:01 am

By Jeff Benjamin

The next wave of equity opportunities lie in big, “boring” companies that have been largely overlooked in the current rally, according to hedge fund manager Joel Hirsh. “The companies with the most significant competitive advantages right now are priced as average companies,” said Mr. Hirsh, manager of the $170 million long-short New Millennium Fundamental Hedged Equity Fund LP, which is part of the $1.4 billion managed by Kovitz Investment Group LLC. Mr. Hirsh's portfolio is currently 60% net long with positions in Lowe's Cos. Inc. (LOW), Wal-Mart Stores Inc. (WMT), Walgreen Co. (WAG) and Automatic Data Processing Inc. (ADP), among others. “These kinds of companies are not being valued the way they should be, because everyone is looking to get in on the high cyclical trades of things they think will pop when the economy turns,” he said. “But most of those companies have already seen their big gains.” According to Mr. Hirsh, companies that are viewed as “somewhat boring and less levered to a cyclical recovery” are well-positioned regardless of the strength of the recovery.

“You don't need as strong of a recovery for a company like Wal-Mart to benefit,” he said. “And it's because of where they're trading now that we see such significant upside.”

As a bottom-up stock picker, Mr. Hirsh sees a company such as Lowe's as a long-term play on the housing industry.

“If you're looking at monthly returns you might not be able to own a company like Lowe's, but we're holding it for a housing recovery, and that might take a couple of years,” he said.

“Some of these stocks are priced as if the market is expecting this economic downturn to last forever.”

0
Comments

What do you think?

View comments

Most watched

Events

Finding your edge from Tony Robbins

Guru Tony Robbins has helped a lot of people, but armed with his psychology Financial Advisor Josh Nelson has helped his practice soar.

Events

Finding innovation in your firm

Adam Holt of AssetMap explains how advisers understand they need to grow, but great innovation may be lurking right under your nose.

Latest news & opinion

10 IBDs with the most annuity revenue

Here are the independent broker-dealers that brought in the most annuity revenue last year.

LPL expanding platform to include employee brokers

The largest IBD in the country has agreed to buy a small broker-dealer in Florida to kick off the new effort.

Hopes high for bill to ease small-firm adviser regulations

High-ranking, bipartisan members of the House Financial Services Committee back the legislation.

Redtail CRM data breach exposes personal client data

The information exposed includes names, addresses, dates of birth and Social Security numbers.

This strategy can double your estate-tax exemption

'Portability' allows a surviving spouse to tack the decedent's exemption on to his or her own. Despite the higher threshold for paying estate taxes in the 2017 tax law, experts recommend filing for the benefit.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print