We had the pleasure of sitting down with Todd Sullivan, general partner of Rand Strategic Partners, in Boston. One of Todd’s favorite ways to generate investment ideas is to follow “cannibals” – CEOs that have been reducers of their companies’ share count on a consistent and material basis.
Todd also writes a highly instructive blog at ValuePlays.net that features his ideas and commentary on value investing topics.
The following transcript has been edited for space and clarity.
MOI Global: Tell us a bit about what piqued your interest in investing and, specifically, looking for companies that have great capital allocation and know when to buy back shares?
Todd Sullivan: Since I was eighteen, I’ve always either owned a business or have been investing in them, so to me value investing was a natural offshoot of being an owner of a business. Whether you’re buying a mobile station or a hardware store, you’re looking for the same features as you would if you’re buying stock in an oil company or a hardware store company. It was a natural progression to go from owning a business to investing via a value approach.
I’m a patient investor. I don’t have the skillset of a trader — in and out of things — I’ve always enjoyed the story of the stock, finding out, is this a good buy? Why is it a good buy? What specific things make it attractive to me, and is it at a good price, and then buying it and watching it realize the value that’s there.
MOI: Tell us a bit about some of the ways you generate ideas focused around that concept of capital allocation and share buybacks.
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