Micro-Caps Now Give 'Bang for Your Buck'
You own Morton's Restaurant Group (MRT) in your portfolio, but are people going to be eating expensive steak dinners if we get a double-dip recession?
Dedio: The consumer might slow their steak purchases, as we learned in the recession in 2008 and 2009. However, Morton's survived and the brand stayed intact. The downturn didn't really tarnish their service or their brand. They didn't offer specials to reduce their value proposition. They kept pricing firm. And they continue to attract the high-end diner. Corporate expenses are allowing diners to go out again and spend for entertaining clients. And consumers are also slowly coming out of the woodwork to go out to eat for specials occasions. Finally, the company has announced that it is for sale, so we are expecting a transaction to occur.
Lazard (LAZ) isn't a micro-cap, but it's small relative to other financials. Why do you want to own Lazard?
Dedio: About half of Lazard's business is advisory, so it's levered to M&A, which is heating up. In fact, Lazard advised Google on its Motorola transaction. The other half of their business is asset management, and that business actually has assets under management that are greater now than prior to the stock market's peak in 2007. And finally, it's trading at huge discount to its long-term valuation multiples.-- Reported by Gregg Greenberg in New York.
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