Fresh Ideas to Chew On

 | Feb 05, 2013 | 2:00 PM EST  | Comments
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Columbia University, the heart and soul of value investing in academia, recently concluded its annual Investment Management Conference. This is the institution where the late Ben Graham taught his legendary security-analysis course, and whose students have included Warren Buffett and the late Walter Schloss. Fittingly, this year the conference featured an A-star list of brilliant thinkers. Among them were Seth Klarman -- who has compounded money at close to a 20% clip for nearly 30 years now -- as well as Bruce Berkowitz, Jeremy Grantham and Bill Miller. 

The speakers offered invaluable and copious doses of investment wisdom. For instance: "Investing should be absolute, not relative. If there are no bargains, then hold cash." There was also this gem: "Get away from the game of trying to figure out where the market is going to go. Buy and value companies you can hold for years, even if a depression is around the corner."

We were also privy to some intriguing stock picks. Given that investors have tens of thousands of equities from which to choose, it's a unique advantage when skilled professionals can serve as our stock screens. Some of my best investments have come from piggybacking on others' ideas. Much of the time, after an hour of researching an idea I'll decide not to invest -- usually because the price has moved up or I just don't understand the thesis. However, sometimes the ideas are so compelling that I'll decide to pull the trigger. 

With that in mind, one highlighted name was Universal Display (PANL). This company aims to commercialize organic light-emitting diodes, or OLED technology. Compared with other kinds of lighting, such as LCD, OLED is cheaper to manufacture and more efficient; smartphones and televisions, for instance, are moving toward this technology. Universal holds key patents in it, and many consider it the Qualcomm (QCOM) of this market. Shares are currently trading for $30, down from a 52-week high of $48. The market capitalization is $1.4 billion, and the balance sheet is debt-free, with more than $200 million in cash. Insiders own 23% of the share float, and nearly 28% of the shares are held short. 

Bed Bath & Beyond (BBBY) was another pick. After climbing to nearly $80 a share, shares now trade near a 52-week low at $58. Moreover, Bed Bath remains one of the best-run and most profitable retailers. Return on equity of 25% may merely seem impressive, but it's spectacular when you consider that the company is debt-free. 

Finally, small-cap Vishay Precision (VPG) was another pick. Vishay is a leader in what is known as resistive-foil technology -- something about which I know next to nothing. From what I understand, though, it's a key component of many basic industries that rely on the technology for precision measurements, control systems, electronic display signals and other instrumentation. Vishay's products are used in the waste-management, agriculture, medical and pharmaceutical industries, to name a few. Again, we have a very high-quality balance sheet here: Against a market cap of $178 million, the balance sheet shows $90 million in cash and $11 million debt. 

I haven't looked closely at these names, save for Bed Bath & Beyond, of which most of us are aware to varying degrees. But good ideas are getting harder to come by, so I'll take any opportunity to delve deeper into a few fresh ones.

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