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By Ryan Leggio | 08-25-2009 11:37 AM

Oppenheimer's Govil on Two Financial Picks

Oppenheimer Main Street manager Mani Govil gives his take on the outlook and attractiveness of Chubb and American Express.

Ryan Leggio: Can you give us a little bit of your opinion on a couple of financial companies that you own right now? One being the insurance company Chubb, which you owned in the previous fund and, maybe another, American Express, where there is a lot of controversy there of what the true intrinsic value is there.

Mani Govil: Chubb is a very good execution company. They consistently execute far better than the competitor's insurance company. If you look at some of the commonly looked at metrics, such as combined ratios and so on, they have been very disciplined in terms of pricing. They have been very disciplined in terms of execution. If you look at, for example, Consumer Reports and look at how they are viewed by their customers, they are viewed very favorably. And here's a company that is also valued very cheaply relative to both history as well as future prospects. So we think it is a wonderful investment for that reason.

American Express, a wonderful franchise, got a little overvalued and started having some problems in terms of delinquencies and so on. The franchise has good, long-term robustness. It is going to be there for a long period of time. However, because of the short-term credit-related problems, the stock price went down quite a bit. That was the time to get into the company. This is very typical. Typically good quality companies may have short-term issues and the market tends to focus much more on short term than long term. Those are some of the best investing opportunities for fundamental investors like us.

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