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By Jason Stipp | 07-13-2010 08:28 AM

Winters: Great Time to Shop for Undervalued Securities

Wintergreen's David Winters sees opportunities in equities across sectors and around the globe.

Securities mentioned in this video
NSRGY Nestle SA
WGRNX Wintergreen Investor
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Jason Stipp: I am Jason Stipp for Morningstar. With the market still prone to fits of volatility in 2010, we're checking in with noted stock picker David Winters of the five-star global stock Wintergreen Fund. We are here to learn a little bit more about his process and where he is finding opportunity in today's market.

David, thanks for joining me.

David Winters: Great to be here.

Stipp: David, you are a well known stock picker who looks for what you call the trifecta in companies that you invest for your portfolio; that's strong companies with good management at a good price.

I'd like to start, first of all, with the good price piece of that trifecta. With the U.S. markets down in 2010 year-to-date and the global markets down even further, how has this affected the opportunity set that you are seeing out there? Are you seeing more opportunity to put money to work this year in the market?

Winters: I think that prices all over the globe have come down. And so, it's actually a great time to go shopping for undervalued securities. The irony, of course, is that most people are petrified and they are sitting in cash or on the sidelines. And so, I think almost every country in the world offers deals today because people are sellers of stocks instead of buyers.

Stipp: And the opportunities that you're finding, are there any patterns? Are you finding that any themes are developing as you are doing your bottom up stock picking process, anything that's sort of coming forth of a particular area of opportunity across the world?

Winters: Well, the thing that stuns us, really, is that because people are fleeing equities in droves that you can buy, again, almost anywhere in the world, really good quality companies at very reasonable prices. So I think the pattern is that if you have the guts – and we think eventually there's going to be some glory, hopefully, lots of glory – to own quality companies at very attractive prices in all kinds of sectors, whatever sector you want to be in.

Stipp: So, on the point of quality companies, that's the second – the second question I really wanted to ask you on the good business piece of your investing philosophy. There was a lot of talk at the Morningstar Conference, a lot of concern actually about some of the headwinds that are out there, so the sovereign debt issues and the debt issues in developed world and the notion of the austerity measures that some countries may have to undertake as well as the whole idea of a slower growth environment that we may be facing.

When you are thinking about some of these possible headwinds, how do they factor into your analysis of a company and its prospects? And then, in short, I think what I want to ask you is what does it mean to be a good business in the kind of environment that we're facing today?

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