Quick Take: Edward von der Linde believes the best way to minimize risks and maximize returns in investing is to marry quantitative and fundamental analysis.
That’s what von der Linde does as lead portfolio manager of the Lord Abbett Mid-Cap Value Fund/A (LAVLX). First, he relies on a computer model to screen for companies with histories of profit and sales growth. Then he looks for catalysts in either a company or an industry that can push a stock higher.
Although his fund lost 9.8% last year, it topped its mid-cap value fund peers, which dropped 13.6%, and the Standard & Poor’s 500-stock index, which was off 22.1%. For the five years ended in December, Lord Abbett Mid-Cap Value returned 9.2% on average, compared to gains of 3.4% by similar funds, and a loss of 0.6% by the index. The portfolio, which von der Linde has helped run since late 1995, is a Standard & Poor’s Select Fund.
The Full Interview:
Not much changes in the Lord Abbett Mid-Cap Value Fund. In running the portfolio, Edward von der Linde says he doesn’t buy and sell stocks very often.
“We’re boring and dull,” he quips. “We sort of plod along.”
One company that made its way into the $2.2-billion fund is MeadWestvaco Corp (MWV), which grows trees that it uses to produce paper products. The fund manager bought the company about a year ago, when it was formed through the merger of Mead Corp. and Westvaco Corp.
At the time, von der Linde says, Wall Street analysts wanted no part of the new entity because they feared its financial results would be disappointing. However, von der Linde, who looks for catalysts that can boost a stock, saw one in MeadWestvaco’s combined management. The business also stood out because it was generating a lot of cash while paying down debt and offering a good dividend yield, von der Linde says.