Interview with Smead Capital Management's CEO Bill Smead

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Interview with Smead Capital Management's CEO Bill Smead

Smead Capital Management
We recently spoke with the Chief Executive Officer/Chief Investment Officer of Smead Capital Management, Bill Smead. Below, Bill discusses his firm’s investment strategies as well as some forecasts for 2015.

Insights From Bill Smead

MutualFunds.com: In looking at the Smead Value Fund (SVFAX) and seeing the word “value” in the title, we were pleasantly surprised at the tremendous outperformance the fund has had not only in 2014, but especially during the recent five years. What would you chalk up the tremendous results to?

Bill Smead: We have been optimistic about the U.S. economic recovery and stock market. Optimism has been cheap and in the minority.

MutualFunds.com: When we look at some of the value names in your top holdings, some of the companies have quite transformed themselves into more growth-oriented companies as well. Could you tell us which of these fit that mold in particular?

Bill Smead: Value can come in the form of deep discounting or misconceived future success. We own about half of our portfolio in both sides of value. Misconceived bright futures at JWN, CMCSK, CAB, WFC, and NVR.

MutualFunds.com: Many are seeing the drop in oil prices as an opportunity to step up and buy the space. Do you see value there?

Bill Smead: Until energy stocks are damned and hardly anyone has the guts to mention them, we won’t touch them.

MutualFunds.com: Are there sectors that you are simply avoiding and maybe have been for a while?

Bill Smead: We are avoiding energy, basic materials, heavy industrials.

MutualFunds.com: What would cause you to put a stock on the sell block? Does a simple increase in a stock’s beta necessarily make you wary?

Bill Smead: We sell a stock if it violates our qualitative criteria, if it gets too popular, or if we decide that we were just flat wrong in our analysis.

MutualFunds.com: Finally, What are the main themes you feel investors should pay attention to as we head into 2015?

Bill Smead: Watch for a surge in echo-boomer house buying in first-time home buyer statistics.

The Bottom Line

For more information on Bill Smead and Smead Capital Management, be sure to check out Smeadcap.com

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of MutualFunds.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Smead Capital Management

Interview with Smead Capital Management's CEO Bill Smead

We recently spoke with the Chief Executive Officer/Chief Investment Officer of Smead Capital Management, Bill Smead. Below, Bill discusses his firm’s investment strategies as well as some forecasts for 2015.

Insights From Bill Smead

MutualFunds.com: In looking at the Smead Value Fund (SVFAX) and seeing the word “value” in the title, we were pleasantly surprised at the tremendous outperformance the fund has had not only in 2014, but especially during the recent five years. What would you chalk up the tremendous results to?

Bill Smead: We have been optimistic about the U.S. economic recovery and stock market. Optimism has been cheap and in the minority.

MutualFunds.com: When we look at some of the value names in your top holdings, some of the companies have quite transformed themselves into more growth-oriented companies as well. Could you tell us which of these fit that mold in particular?

Bill Smead: Value can come in the form of deep discounting or misconceived future success. We own about half of our portfolio in both sides of value. Misconceived bright futures at JWN, CMCSK, CAB, WFC, and NVR.

MutualFunds.com: Many are seeing the drop in oil prices as an opportunity to step up and buy the space. Do you see value there?

Bill Smead: Until energy stocks are damned and hardly anyone has the guts to mention them, we won’t touch them.

MutualFunds.com: Are there sectors that you are simply avoiding and maybe have been for a while?

Bill Smead: We are avoiding energy, basic materials, heavy industrials.

MutualFunds.com: What would cause you to put a stock on the sell block? Does a simple increase in a stock’s beta necessarily make you wary?

Bill Smead: We sell a stock if it violates our qualitative criteria, if it gets too popular, or if we decide that we were just flat wrong in our analysis.

MutualFunds.com: Finally, What are the main themes you feel investors should pay attention to as we head into 2015?

Bill Smead: Watch for a surge in echo-boomer house buying in first-time home buyer statistics.

The Bottom Line

For more information on Bill Smead and Smead Capital Management, be sure to check out Smeadcap.com

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of MutualFunds.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


Sign up for Advisor Access

Receive email updates about best performers, news, CE accredited webcasts and more.

Popular Articles

Download our free report

Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

Why 30 trillion is invested in mutual funds book

Download our free report

Find out why $30 trillon is invested in mutual funds.

Why 30 trillion is invested in mutual funds book

Download our free report

Find out why $30 trillon is invested in mutual funds.


Read Next