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Value Investing Live Recap: David Dietze and Fritz Schoenhut 2022 Update

Key takeaways and questions

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Apr 20, 2022
Summary
  • Dietze and Schoenhut discuss value opportunities in 2022.
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GuruFocus had the pleasure of hosting a presentation with David Dietze, the managing principal and senior portfolio strategist at Peapack Private Wealth Management, the wealth management division of New Jersey-based Peapack-Gladstone Bank. Dietze founded his own investment firm in 1993, Point View Wealth Management, which became part of Peapack-Gladstone Bank in 2019. Peapack Private manages/administers over $11 billion, primarily in separately managed accounts.

Dietze graduated magna cum laude and Phi Beta Kappa with honors in economics from Dartmouth College and earned a law degree from The University of Chicago. He also holds the CFA and CFP designations.

Dietze is a much sought-out resource for the media, including Bloomberg, CNBC, Fox, The Wall Street Journal, The New York Times, LA Times, Forbes, U. S. News and World Report, Investor's Business Daily and The Star-Ledger.

Dietze manages stock and bond portfolios for his clients using a long-term, balanced, disciplined and diversified investment philosophy. Using extensive research and sound investment principle, he strives to produce superior returns for clients in a way that accords with their individual goals and risk tolerances. He does this by constructing a comprehensive investment strategy, using the appropriate combination of stocks, bonds and mutual funds for each client.

Peapack’s equity investment approach is to search for those that appear inexpensive relative to their fundamentals. It looks for investments that maximize the earnings to which each dollar of investment outlay is entitled. The firm also takes into consideration other fundamental factors, including market position and strategy, quality of management, growth prospects and margins. Peapack tries to minimize exposure to companies with excessive debt levels. It wants to know what the companies are doing with their cash flow and that they are making use of it in an appropriate manner. Based on historical research, Dietze believes a value-based approach may deliver superior returns with less risk and more income.

Watch the full stream here:

Key takeaways

Dietze kicked off the presentation by introducing Fritz Schoenhut, managing director and portfolio manager at Peapack, who co-presented with him.

Between the two, they discussed their investment process and equity strategy, highlighting that they seek companies with a definable and sustainable competitive advantage, strong brands and good earnings power and cash flow, among other factors.

They then transitioned to provide their outlook for 2022, emphasizing inflation is the most important macro issue. However, Dietze noted the Russia-Ukraine war and new Covid-19 variants are also significant factors that could impact markets moving forward.

Longer term, Dietze said he is still bullish on the market.

Stocks

Dietz and Schoenhut then discussed seven stocks and one exchange-traded fund that they like currently. It should be noted, however, that these are not recommendations to buy or sell a stock and past performance is not indicative of future returns.

One stock they feel is a potential value opportunity is Exxon Mobil Corp. (

XOM, Financial). While the energy sector has performed well so far this year, the company can further benefit from the fact it is involved in all areas, including refining and chemical operations. It also has an additional hedge on Russia and inflation.

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Another attractive opportunity they feel has potential is CVS Health Corp. (

CVS, Financial). As demand for health care services continues to grow, Schoenhut noted foot traffic on the retail side of the business is also expected to increase.

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Questions

While the audience asked several questions about Dietze and Schoenhut’s views on a number of different stocks, others were curious to know their thoughts on the market’s valuation. Dietze said that while the market is expensive from a historical perspective, that doesn’t mean you should “take your investment cash and put it under your mattress.” He added that at the end of the day, it is all about looking at the valuation of stocks versus the alternatives, which are also very expensive.

Another viewer asked about stagflation, which Dietze said should be “much avoided.” As prices for consumer goods rise and the Federal Reserve starts increasing interest rates, he said there is no doubt it will break the pace of economic growth, making housing and borrowing, among other things, more expensive.

Disclosures

I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours. Click for the complete disclosure
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