Ankur Crawford Call Transcript


Ankur Crawford (continued): There was a discussion. Since that discussion, our ESG team checked in with them more recently. They said it was because of that discussion that they started focusing on ESG and their ESG score has improved significantly. So, while we’re not saying, “Well, we’re only going to buy high ESG businesses,” I think we can act in a positive way to influence businesses to become better global citizens.

taking the Apple business on the iPhone and effectively enabled a competitor called Taiwan Semiconductor. In the process, they lost their key competitive advantage.

Instead of Intel, I recently bought Taiwan Semiconductor because if you look at this business, it’s one of two players in the market that manufacture all leading-edge chips. It’s arms dealer to the world. They have a huge share in the market. Intel is rumored to actually start manufacturing with them for their core CPU. They have pricing power. They have growing margins and a growing moat. When I think semis, I think that because people perceive them to be a slightly more complicated group to understand, investors kind of shy away from them saying, “These are very cyclical.” But there’s a powerful growth story behind semiconductors over the next five years. Speaker Question: My question really has to do with the huge volatility we are seeing sometimes in individual names. How do you guys pare a position because I’m finding it to be something that you need to be ready to jump on and very quickly. I just want to know how that process goes. Sometimes information is being taken in by the market incorrectly and people shoot first.

Dennis Hearns: I might add that PRI gave Alger a score of A.

Speaker Question: Wondered your thoughts on chipmakers, your Intels, your AMD, etc. Do you prefer one or the other? Do you like the area?

Ankur Crawford: As you know, I was a semiconductor analyst. This is a question I could expound upon for a long time. If you look at the coverage in our tech portfolio, the biggest change over the last six months has been an overweight positioning in semiconductors. This has been catalyzed by the fact that if you look at semis in general, you will see that software is driving the digital transformation, software is great, software is eating the world–but who do you think is actually doing all the compute for that software? I think that whether it’s autonomous driving, whether it’s IoT, whether it’s AI, whether it’s machine learning, each of those has a brain or an engine behind it. Semis are those brains. If you look at the valuations, the valuations actually are on a free cash flow and earnings basis. They’re significantly more palatable than some of the valuations that we’re seeing in their software brethren. I’m actually pretty excited about what’s going on in semis. We do not own Intel. Intel’s prowess was manufacturing. And they have fallen behind for a multitude of reasons in part because they made what I believe are some strategic mistakes early on by not There’s a chip. There’s a brain behind all of that computation.

How do you go about paring a stock or actually selling if you have to? Just want to understand how that goes about and whether there’s a call or whatever it is.

Ankur Crawford: I will tell you the benefit of having the team be as cohesive as it is: when things are slow, for example, right now there’s no conferences, there’s no earnings, my calendar is filled with going through models with our team, models of companies that we own, models of companies that we don’t own understanding risk rewards, understanding what buy points are, understanding what the sell points are, understanding what’s getting baked into the stocks at each of those buy or sell points.

Conference Call 7/11

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