We just can't talk about management enough.
The other day when I was interviewing activist Nelson Peltz about who he likes, he tried to recall the name of the CEO of Honeywell (HON).
"Dave Cote," I blurted out, glad that someone of Peltz's caliber recognized the successes of this man with what some would call an unwieldy conglomerate, but I just call it a powerhouse. Go look at Cote's numbers. Despite severe currency headwinds, it is a shocking display of managerial brilliance with huge margin gains in every category. Making more with less. Growing things organically. Extraordinary stuff.
Then there's the Google's (GOOGL) quarter last night. People ask me how much of a difference could Ruth Porat make in such a short time as CFO. It is simple: a ton. For once, I was not befuddled about how Google was really doing. For once, I was not worried that it might not understand that a chief goal of a public company is to reward shareholders, not just its management. Google showed you how important profit is by generating that profit and making it clear that it has done some wise spending on infrastructure, but implied there had been some unwise spending away from that. I can tell that kind of spending is over.
Plus, telling a story matters. Google's You Tube had apparently been going well for months, but you wouldn't have known it from the last two calls. That's over, too.
Google sounded like a smart tech company with a big growth path and lots of legitimate irons in the fire that might be about to either return a lot of capital or do a thoughtful acquisition. It seemed (and here is a first) undervalued, which it has been for years, but it was obscured by the lack of a profit imperative.
The third one is tougher: PPG Industries (PPG). CEO Chuck Bunch took a sleepy commodity-chemical company and turned it into the world's best proprietary-chemical company. He pioneered this change, of which most companies' managements can't even dream about. Sure, DuPont (DD) and Dow Chemical (DOW) are trying to do it but that was goaded by activists at the barrel of a gun, so to speak. No activist could ever keep up with Chuck. He bought low, sold high, took in stock, raised the dividend, returned capital and took share.
I mean, what didn't the guy do except bring home a Stanley Cup or a World Series for Pittsburgh? He's amazing. But he's retiring, and I have to tell you that while I am sure he has a fabulous team in place -- like the team that I know Jim McNerney at Boeing (BA) has in place -- this is a loss, plain and simple.
Cote, Porat and Bunch are game-changers. More than you will ever believe.