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TWST: Please tell us about M&I Investment Management and your investment
philosophy.
Mr. Salmon: M&I Investment Management is headquartered in Milwaukee, Wisconsin,
and we are a wholly owned subsidiary of the Marshall & Ilsley Corporation, a
diversified financial services company and a member of the S&P 500. We have over
$25 billion under management, which includes over $10 billion in our proprietary
fund family, the Marshall Funds. Our firm offers a wide range of equity, fixed
income and cash management strategies.
Our team is responsible for the Marshall Small-Cap Growth Fund (MRSCX) and the
Marshall Mid-Cap Growth Fund (MRMSX). The core of our investment philosophy is
that stock performance follows improving business fundamentals, and the market
often underestimates the magnitude and duration of improving fundamentals. TWST: What about the environment at this time for investing in small and mid-cap
growth? How have you been faring in these turbulent market times? What is the
outlook for your type of investing going forward?
Mr. Salmon: We are bottom-up stock pickers, picking one stock at a time. We view
the stock market environment and the economic environment as a given. Right now,
obviously the US economy is slow and has been in a slowing process for about
nine to 12 months. Also, the stock market has been struggling for a while. It is
down year to date. Small caps have generally underperformed mid-caps and large
caps. We just take that as a given and continue to focus on our process for
stock selection and building a portfolio.
In terms of how we go about that, our process is to focus on companies that have
good business conditions today and have improving business fundamentals. These
typically show up in the financial statements through an increasing rate of
earnings and/or revenue. We then try to understand what catalyst may be driving
the improvement, such as a new product or product cycle, a transformative
acquisition, a management change or a cyclical change. We want to understand
that catalyst and focus on how long the improvement in the business will
continue, and what that might mean for earnings growth. We are avoiding stories
or companies where there is substantial uncertainty about current and future
business conditions. We are focused on "explainable growth," which means we can
clearly understand why a company's business is getting better, so that we can
have confidence it is going to continue. We tend to be quite diversified by
sector and our process allows us to find stock selections in almost every area
of the market.
Our screening process keeps us on top of things that are changing, because that
is one of the important things about the small cap market; it is very dynamic.
Companies can change rapidly either positively or negatively. We also are
constantly looking at fresh ideas and figuring out if they fit what we are
doing.
Tickers included in this excerpt: CLHB, MCF, TWI, TZIX
For more information call (212) 952 7433. The
Wall Street Transcript does not endorse any of the comments made by interviewees, and does
not make stock recommendations.
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