Meet the next generation of great portfolio managers (Part 2)

By John Spence


This is the second installment of a multi-part series on the new breed of portfolio managers who are helping investors reach their financial goals on Covestor's investment marketplace.

On Covestor, individuals can invest right alongside these managers and share their performance and expertise.

Today we'll meet Drew Steinman, who manages the Leveraged Value portfolio.

The portfolio has only been on Covestor's marketplace for about year. However, Steinman is off to a fast start.

Including fees, the portfolio has posted an annualized return of 79.4% as of July 17 since its inception in July 2013, compared with a return of 22.9% for the S&P 500 over the same period.

Steinman is among the individual investors on Covestor's platform. He is a Certified Public Accountant (CPA), and for his “day job” he works as a reporting analyst in the healthcare insurance industry. Previously, he worked as an auditor where he examined companies in natural gas, public utilities, telecommunications and manufacturing.

Below is an edited transcript of a recent interview:

Q: How has your accounting and work experience helped your investing?

A: It definitely gives me perspective and I like to dig into companies' financial statements. As a value investor you need to look well beyond just the quarterly announcements and earnings per share. You really need to tear apart all the financial statements to see more details of what's going on at the company. Just to give an example, when I first started managing the Leveraged Value portfolio on Covestor, I was investing in natural gas companies. On the surface, things looked bad because the companies were writing down inventories because energy prices were so low. But if you looked at operating cash flow, I believed the companies would be profitable when the write-downs were over.