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Pat Dorsey, Authority on Competitive Advantage Likes Express Scripts and Google

April 24, 2012 | About:
Dheeraj Grover

Dheeraj Grover

18 followers
Patrick Dorsey, ex-director of research at Morningstar, author of well-known value investing book, "Little Book that Builds Wealth," and current director of research at Sanibel Captiva Trust Co. was on Bloomberg to talk about asset allocation and his views on Express Scripts Holding Co. (ESRX) and Google Inc. (GOOG).

Here is a brief summary of his thoughts:

1. What stocks he will own — companies which are going secular change or change which has been mispriced by the market. Express Scripts falls in this category. He thinks the market is not pricing in massive improvement in its profitability due to scale advantage it will gain after completing its merger with Medco Health Solution Inc.

2. Even if margins are going down but top line is growing at a faster clip he will be fine with investing in that kind of company. Google is a good example of this as it is getting lower price per click and lower margins from the mobile ad market but it is a fast-growing market and very important for Google to establish itself there.

3. Does not recommend selling dividend stocks even when taxes go up until and unless investors have a better place to allocate capital.

4. Europe: He recommends buying stocks which are domiciled in the EU but have large amount of business coming from outside the EU and also have strong balance sheets.

Here is the video:

http://finance.yahoo.com/video/marketnews-19148628/sanibel-s-dorsey-likes-express-scripts-google-29050873.html

About the author:

Dheeraj Grover
I am an individual investor with deep interest in the field of value investing. My ideas and thinking is inspired by highly respected value investors like Ben Graham, Warren Buffett, Walter Schloss, Bill Ruane and Tweedy Browne

Rating: 2.5/5 (6 votes)

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