Collaboration and Profit at Weitz Investment Management

Wallace "Wally" Weitz is the founder and co-chief investment officer of employee-owned Weitz Investment Management, which has more than $4 billion in assets under management and is based in Omaha, Neb. (though Wally was born and raised in my hometown of New Orleans). He is the sole portfolio manager of the Partners III Opportunity Fund and co-manager of the Partners Value Fund and Hickory Fund.

Omaha, Nebraska. Image source: Getty Images.

The investment professionals at Weitz are generalists, but each has an industry in which they are most comfortable. The research process is highly collaborative in nature, so one analyst may identify an idea and do the initial work, but it is eventually vetted by the entire team. The Weitz team looks to buy quality compounders such as Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Visa (NYSE: V), MasterCard (NYSE: MA), Amazon (NASDAQ: AMZN), and Thermo Fisher Scientific (NYSE: TMO). It uses five-year discounted cash flow (DCF) models to estimate fair value and insists on a margin of safety. This process works! Over an almost 35-year period, his Partners III Opportunity Fund has produced 12.4% annualized returns, compared with 11% for the S&P 500.

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Source: Fool.com