3 Picks From the Post-Holiday Bargain Bin - Barron's Interview

Includes: BRK.A, BTI, CTO, WYNN
by: SA Eli Hoffmann

Barron's interviews David Winters, CEO, Wintergreen Advisers. His strategy is to find quality stocks far from the beaten path. Winters says the current market downturn is "a gigantic after-Christmas sale" featuring indiscriminate selling at bargain-basement prices. Presently, he looks for companies with healthy, growing free cash flow that are run by shareholder-friendly management. Companies he likes:

  • Consolidated-Tomoka Land (NYSEMKT:CTO) -- Winters, with one seat on the board and a push for three more, wants the company to hold on to and develop its land portfolio. He notes that buying real estate now on the cheap can be a hugely successful strategy for the patient.
  • Wynn Resorts (NASDAQ:WYNN) -- super attention to detail; management has a huge equity stake in the company. Investors fail to understand the value of its Macau development, and in general tends to undervalue complex companies like WYNN due to their obsession with the short-term.
  • Berkshire Hathaway (NYSE:BRK.A) -- its $40B in cash, which haunted investors not so long ago, now seems prescient. In a market full of liquidity issues, its pristine balance sheet and massive free cash flow provide a huge downside cushion.

Winters says he's worried about inflation, and likes stocks that can raise prices to overcome it -- specifically tobacco (he mentions British American Tobacco (NYSEMKT:BTI)) and gaming companies.