Mark Schultz, MTB Mid-Cap Growth Fund
Two years ago, Schultz, portfolio manager at the Baltimore-based MTB Mid-Cap Growth Fund (AMCRX), told his investment team that they were seeing stocks of very good companies cheaper than they would ever see them again in their careers.
"Not enough people were stepping up to avail themselves of the opportunities that the market was giving them," Schultz recalls. "Looking back now, it's astonishing. Things are much more rationally valued now than they were then. Stock picking is much more challenging now. Back then, people were leaving $100 bills on the sidewalk."The MTB Mid-Cap Growth Fund has roughly 80 holdings with assets totaling $220 million as of Dec. 31. Most of the fund's allocation is toward technology and industrials. The fund's top holdings include Coach (COH) and Altera (ALTR), according to the latest fact sheet. Schultz admits it has become tougher now two years later to find attractive picks, but he says it's not impossible. Having bought into Lululemon Athletica (LULU) at the bottom, he doesn't expect a stock like that to rise tenfold. CBS (CBS - Get Report), despite a 49% rally over the last six months, is one of Schultz's highlighted picks. CBS is one of the fund's largest holdings, and Schultz says he's still a buyer at this point. "CBS is exposed to the short-cycle recovery in ad spending," Schultz says, noting that the company is still working to monetize the value of its content. "It's a very strong earnings and cash flow story trading at a reasonable current multiple." Schultz also likes financial services provider Raymond James (RJF). Shares of Raymond James are up nearly 45% over the last six months, but Schultz still sees upside potential. "This is a play on the retail investor reengaging in the market," he says. "We see that credit is improving, so it's not as big a drag on results or investor psychology. There is very high recurring revenue, so the revenue stream isn't overly dependent on trading activity." In terms of valuation, Raymond James is trading around the market multiple, Schultz says, which is "quite low for the capital markets."