3 Stocks a $4.6 Billion Portfolio Manager is Buying Now


John Buckingham, the principal and portfolio manager of a $4.6 billion investment firm picked these 3 stocks.

Kovitz portfolio manager and principal John Buckingham recently picked 3 stocks that he believes will thrive in the future, according to Business Insider.

He has been investing for over 30 years now. "I've been at it since 1987," he said on the "ValueWalk" podcast. "In our world, the stock market often gives you plenty of opportunity, given that so many people are emotional about investing." Buckingham is a strong advocate of value investing and looks to Warren Buffett as his idol. His investment philosophy and strategy is very similar to Buffett's.

"We try to buy stocks that are undervalued and out of favor," he said. "We try to do what most people do in their everyday lives, which is to search for bargains to get deals."

Buckingham focuses on price-to-earnings, price-to-sales, and price-to-book metrics. He also likes companies that pay a dividend because he still has a steady cash flow even if the stock takes longer to appreciate. "You have to look at things differently when interest rates are at the level they are today — and I think stocks are really attractive," he said. "I think the market is pessimistic in its view of equities because it should be substantially higher given where we are with interest rates."

Buffett said something similar in May 2019. "I think stocks are ridiculously cheap if you believe ... that 3% on the 30-year bonds makes sense," Buffett said. Over a year later, keeping that same logic, the 30-year US treasury bond trades around 1.5 percent. "When you're looking out longer term, we do believe that ultimately the global economy will rebound," he said. "Life will get back to somewhat normal — and businesses will ultimately get back to the business of doing business."

Buckingham believes corporate profits will swiftly rebound. "You have to keep in mind that these are unusual times, and shutting down the economy has major ramifications," he said. "We want to ensure that the businesses we have can survive — but also so they can survive with our ownership interest intact." He isn't purchasing any company that will struggle to stay afloat through the pandemic. "Balance-sheet strength is super important today," he added.

The three stocks that Buckingham believes are positioned to thrive are:

1) Waste Management (WM)

2) BlackRock (BLK)

3) Lockheed Martin (LMT)

He believes these are "high-quality businesses" that he's had his eye on, but didn't pull the trigger due to high prices. "Those are three ideas of — what I would say — quality names that we bought here recently," he said. "Take advantage of what the market is giving you."

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Economics, Finance and Investing