Top 5 Conviction Picks from Columbia Wanger
Its team, particularly named The Columbia Management Asset Allocation Team holds meetings every month to review the economic investment conditions and the markets. Its members discuss and evaluate whether equities are attractive or not, fixed-income and alternative investments in different industries, types of investments, markets and countries.
As one of the Management Allocation Team puts it: “We dedicate all of our resources to identifying timely investment opportunities and provide a comprehensive choice of equity, fixed-income and alternative investments to meet individual needs.”
Here are some of Columbia Wanger top picks:
Lululemon Athletica Inc. (LULU): LULU is a women athletic apparel retailer and designer. Its specialty is yoga-related goods. However, it has been launching new categories, including general fitness and men's apparel.
LULU primarily operates in Australia, Canada and the U.S. Most attractive about Lululemon is the fact that it has no debt; it holds attractive growth prospects and a strong free cash flow position.
In terms of yoga-related goods, LULU has become a leading branch and is able to charge premium prices for its products. Fortunately there is more. In 2010, sales amounted to about $1,700.
Alexion Pharmaceuticals Inc. (ALXN): ALXN markets and develops drugs for life-threatening medical conditions. It has a unique product: Soliris. Soliris is the first approved therapy for paroxysmal nocturnal hemoglobinuria, a blood disorder. This therapy was also recently approved for the treatment of atypical Hemolytic Uremic Syndrome.
In addition, Alexion is working on other research projects on complement system disorders causing inflammation in the immune system.
As Soliris is Alexion's single product, it can take great advantage in the ultra-rare disease market without affecting the market share. From the medical standpoint, the drug demonstrated its ability to substantially reduce blood clots, fatigue levels, the destruction of red blood cells, and the need for transfusions.
Now, Alexion's future expectation regarding this therapy is to expand the franchise to other rare hematological diseases and common disorders. Indeed, Soliris can be used to treat health problems like hematology, nephrology, transplant rejection, neurology and ophthalmology.
Definitely, Alexion will be able to extend its profit margins.
Ametek Inc. (AME): Ametek is a firm that operates in two business units: the electronic instruments group (EIG) and the electromechanical group (EMG). As regards the former, it builds monitoring, testing, calibration and display devices. As regards the latter, it builds air-moving electric motors.
In 2010, AME results have been outstanding. Indeed, its revenue amounted to $2.5 billion. In 2011, the firm started 2011 with a backlog of more than $829 million. Expectations are really promising. Besides, Ametek has international expansion too. Russia, China and the Middle East are real opportunities in terms of market growth.
FMC Technologies Inc. (FTI): the firm is engaged in building subsea and surface trees that control and regulate the flow of oil and gas from a well. Formerly Food Machinery Corporation, the firm was founded in the 1920s. In the 80s, it started to work on subsea oil and gas production equipment. This type of service is targeted at oil and gas companies.
FMC offers companies the possibility of performing subsea well maintenance faster and cheaper than conventional methods because of the use of cheaper vessels. Subsea separation involves separating the oil, gas, and water mixture undersea rather than above ground.
In terms of results, this technology allows FMC to make progress. Expectations are really good as it is considered that the demand for offshore rigs will improve. Furthermore, FMC's research and development expenses are low as customers typically pay FMC to develop subsea applications.
Abercrombie & Fitch Company A (ANF): Abercrombie & Fitch Co. is a specialty retailer that operates stores and direct-to-consumer operations. ANF particularly sells casual sportwear, personal care products, and accessories. Its brands include Abercrombie & Fitch, Abercrombie kids, and Hollister brands. The company also offers products for women under Gilly Hicks brand.
ANF is present in North America, Europe and Japan.
Abercrombie & Fitch is targeted to young people and it is considered that if teens' consumption increases the brand will grow in scale, and confidence in the brand will stabilize.
In terms of future projects, the company expects to increase its presence on the international level.
In 2011 ROICs were higher that cost of capital, bringing excess profit.
Columbia Wanger is rigorously focused on investments. As its team member added: “We adhere to a rigorous investment process that helps ensure the integrity of our products and enables financial adviser to match our solutions to their objectives with confidence.”