We’re excited to bring Charlie Bobrinksoy as the next investment professional for a Q&A.
Bobrinskoy, the vice chairman, head of investment group and portfolio manager at Ariel Investments, joined the firm in 2004 after 21 years as an investment banker. Ariel Investments is the Chicago-based value asset manager founded by John Rogers (Trades, Portfolio).
To ask Bobrinskoy a question, post it in the comment section below. He will respond with answers shortly.
Ariel Investments takes a patient, long-term approach and invests on convictions rather than benchmarks. In its different funds, the firm applies two schools of thought in value investing: Ben Graham’s notion of buying companies at deep discounts to their balance sheet and Warren Buffett (Trades, Portfolio)’s idea of buying higher-quality companies at a discount to their intrinsic value.
“A critical component is having a strategic, sustainable competitive advantage,” he said in a recent video. “It can come from a great brand. It can come from a great market position. It can come because you’re the low-cost manufacturer. There are lots of different sources of this sustainable competitive advantage, but you have to have it.”
In addition to heading thought leadership at Ariel, Bobrinskoy manages its Ariel value strategies, a concentrated portfolio of all U.S. stocks. The average forward price-earnings ratio of his companies is 13.1, shy of the 14.8 ratio of the Russell 1000 Value Index.
His $59.1 million Ariel Focus Fund holds 30 stocks with a quarter in its largest sector, financials. The largest positions at the end of the first quarter were:
- Laboratory Corp. of America Holdings (LH, Financial)
- BorgWarner Inc. (BWA, Financial)
- Oracle Corp. (ORCL, Financial)
- KKR & Co. (KKR, Financial)
- Lazard Ltd. Class A (LAZ, Financial)
He also sold IBM (IBM, Financial).
Bobrinskoy is optimistic that stocks will remain attractive despite looming interest rate hikes. In his first-quarter letter, he said:
“Despite higher market volatility, we remain cautiously optimistic that steady economic and corporate earnings growth, as well as U.S. tax reform will boost profitability for many of our domestic holdings. In the meantime, while cyclical pressures on inflation are building, we believe technological innovation presents a considerable headwind. Not to mention, history shows that stocks can still do well in a rising rate environment. With the S&P 500 Index trading at 17.1x forward earnings and the Russell 2500 Index trading at 17.6x, valuations remain below euphoric levels.”
Learn more about Ariel’s investments at their portfolio here.
Don’t forget to leave any question about investing for Charlie in the comments section below! Thanks!
