With passive and factor investing dominating the strategies of more and more investors, one would be forgiven for thinking that traditional bottoms-up stock picking is a dying art. But they’d be wrong. This week, the "What Goes Up" podcast talks to Glenn Gawronski, who led the JPMorgan Small Cap Equity Fund to a top 1% performance in its Morningstar category before leaving to start his own investing firm called Byron Place Capital Management.
Gawronski talks about what attracted him to some of the more obscure companies in his "all caps" strategy, as well as his general approach to hunting for stocks. Some highlights of the conversation:
"I’m kind of a financial nerd and a business nerd, and I like to look at everything under the sun and as many businesses as I can. But I have to run screens to find where I need to focus. I do run static screens, let’s say a price-to-free-cash-flow screen, that are valuation sensitive. But they tend not to change much. So I look for what I call inflection-point screens where I’ll look for businesses where maybe there’s insider buying, or there’s a management change, or a company is doing a spinoff, or a change in operating momentum. Those are the screens that generate something interesting. Some type of catalyst to make me take a second look at a business."
Also joining the show is Bloomberg columnist John Authers, who talks about some of his recent columns about value investing and the European debt crisis.
Running time 30:06