Glenn Greenberg's Brave Warrior: Long Financials (CNBC Interview)

Glenn Greenberg of Brave Warrior Advisors sat down with CNBC for a rare interview.  Here's some key takeaways:

- He looks to buy stocks that will have around a 10% free cashflow yield 1-2 years from now

- Focused on 2-3 years ahead, less concerned about short-term swings or quarterly volatility. Likes to focus on companies that build wealth.

- Long financial stocks JPMorgan (JPM), Primerica (PRI), and Charles Schwab (SCHW).  "We made a big bet that normal interest rates would not stay at zero.  It was that simple and we didn't know when they would change, but the payoff we felt would be substantial so we have had a lot of financial stocks in our portfolio the last few years."

- On JPM: "They should be earning $8-9 in a couple of years if rates track at the moderate increases that are in the dot plot (of the Federal Reserve)."

- On SCHW: "Amazing franchise" and sees it largely as a bet on interest rates normalizing ... 175 bps now versus 350 bps back in 2007 on client cash positions.

- On Freddie Mac: "Best business model I have ever seen."

- "(Interest) rates could go a lot higher, Inflation could go a lot higher."

- Also owns Airbus (AIR.PA), Express Scripts (ESRX)

- Says Valeant Pharmaceuticals (VRX) was "biggest investment mistake over last 30 years" for him.  But still broke even on it.


If you missed the interview on TV today, it looks like the video replay is behind CNBC's paywall.

Glenn Greenberg's Brave Warrior Capital Boosts Cimpress Stake

Glenn Greenberg's investment firm Brave Warrior Capital has filed an amended 13G regarding its stake in Cimpress (CMPR).  Per the filing, Brave Warrior now owns 11.6% of the company with over 3.79 million shares.

This is an increase of around 1.26 million shares.  They previously owned 2.53 million shares at the end of the first quarter.  The new filing was made due to activity on July 31st.  At the end of July, shares dropped from around $78 down to around $63 and have since rebounded to $70.

Formerly known as Vistaprint, this business has attracted a few other value investors besides Brave Warrior: Arlington Value and Cantillon Capital. 

Greenberg runs a concentrated portfolio and is previously of Chieftain Capital.  We've briefly detailed what Greenberg looks for in an investment before.

Per Google Finance, Cimpress is "a technology and manufacturing company based in the Netherlands, which provides professional marketing products and services. It is engaged in mass customization and Web-to-print technology. The Company aggregates, via the Internet, large volumes of individually small, customized orders for a spectrum of print, signage, apparel and similar products. Its portfolio of brands is aimed at three target groups: small and micro businesses, graphic professionals, and home and family customers, and includes such brands as Vistaprint, pagemodo, webs, Araprint, Drukwerkdeal.nl, Pixartprinting, Printdeal.be, printi, albelli, FotoKnudsen, and Onskefoto, among others. Its products are available in more than 130 countries.."

Glenn Greenberg's Brave Warrior Capital Starts New Position in Higher One (ONE)

Glenn Greenberg's hedge fund firm Brave Warrior Capital just filed a 13G with the SEC regarding shares of Higher One Inc (ONE). Per the filing, the hedge fund has revealed a brand new stake in ONE with 5,786,263 shares.

Brave Warrior now owns a 10.18% ownership stake in the company due to trading activity on February 29th, which required the disclosure to be filed.

Per Google Finance, Higher One is "a provider of technology and payment services to the higher education industry. The Company provides a comprehensive suite of disbursement and payment solutions specifically designed for higher education institutions and their students. It also provides campus communities with student-oriented banking services."

You can read a brief excerpt about Glenn Greenberg's approach to investing here.

Glenn Greenberg on His Approach to Investing ~ Quote of the Week

Market Folly's quote of the week this time around comes from Glenn Greenberg of Brave Warrior Capital (formerly of Chieftain Capital). His quotation addresses his approach to investing which he's practiced for over 25 years:

"We are looking for good businesses where the fortunes of those businesses don't turn on slight changes in GNP statistics, where there is substantial free cash generated and put into the hands of extremely capable managements which will not go out and spend that money foolishly by over-expanding plant capacity, or paying too much for an acquisition to get into somebody else's difficult business. We look for people who have a vision of building something, building their company into a great business."

~ Glenn Greenberg

For more words of wisdom from top hedge fund managers, scroll through all of our previous quotes of the week.