Here at The Motley Fool, we recently added four new analysts to our investing team. In this week's installment of our Between Two Fools interview series, host Jason Moser sits down with analyst T.J. Piggott about his journey to The Fool's investing team, how he approaches investment analysis, and more.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. A full transcript follows the video.
This video was recorded on May 13, 2019.
Jason Moser: As I mentioned last week, we recently brought four new analysts onto our investing team here at The Motley Fool. We wanted to take the opportunity here on Industry Focus in Between Two Fools to introduce you to these analysts. Last week, we had Maria Gallagher. This week, I had the opportunity to sit down with T.J. Piggott. I hope you enjoyed our conversation!
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Moser: OK, T.J., first things first. For our listeners, tell us who you are and how you got here to The Fool.
T.J. Piggott: Hi, Fools! My name is T.J. Piggott, and I've been with The Motley Fool for the past four years. Prior to joining the investment team, I was managing the trade desk for Motley Fool Wealth Management.
Moser: That was a little bit different than what you're doing now. Your job description down there managing that trade desk, I think was a bit more process-oriented vs. digging into companies. You weren't doing a lot of research down there, or not as much as you're doing now.
Piggott: Correct. Mostly what I did is, I would implement the portfolio manager's strategy. When a client would entrust us with some of their capital to invest, my team and I would execute those transactions for them.
Moser: That's kind of pressure-packed. I mean, if you fat finger something, you're putting someone's financial lives in jeopardy, right?
Piggott: Yeah. The Motley Fool would make the client right, so I'd be putting our company in jeopardy. So, yeah, a fat finger is a bad thing to do.
Moser: [laughs] In any in any walk of life, I think.
Piggott: Absolutely!
Moser: Well, you get coming here every day like we do, and you get to look at these stocks, and you get to find good ideas and communicate them out to members. Given your investing background, I know you've been investing for a while, one of the challenges I think we all face as investors is trying to figure out what kind of investor one actually is. I know when I got here back in 2010, I had been investing for a long time. My dad introduced me to it when I was a kid. But I didn't really know what kind of investor I was until I actually got here and started doing it for a little while, and was able to take some input and lessons from all of these folks on our investing team.
That said, what kind of investor do you consider yourself today? Has that changed? Are you still not sure? Value, growth, somewhere between?
Piggott: I've evolved over time, so it's hard to box me into a corner, per se. My portfolio is pretty well diversified. But if you must put me into a style, I'm a growth-oriented investor, focusing more on the small-cap space.
Moser: Nobody puts T.J. in a corner.
Piggott: No, no way! It's kind of funny progression. When I first got into the business back in 2006, my mentors were large-cap value managers. It's kind of weird going from that to big growth.
Moser: Here especially for a long time, most investors here were of that value nature. There was a tremendous lean toward the value side definitely when I got here back in 2010. I think over time, that's changed. I think a lot of us have seen the merits in growth names. Obviously, technology has changed a lot of things in a short amount of time. Growth is a little bit more of a risky style of investing, perhaps, but frankly, I mean, if you're looking to invest and grow your money, I mean, growth companies are going to represent typically those best opportunities. I always found value investing to be really difficult. You not only had to call the right price to actually get into the stock, but then you had to call the right place to actually sell out of the stock. You essentially had to be right twice. Growth investing, you kind of just have to be right once. But what do I know?
Piggott: Time will tell.
Moser: I guess we'll see! Since you got here, and this can be before you even came up here to the investing team, it could apply to when you were downstairs as well, what have you learned in regard to investing? Something you've learned that you either weren't expecting or something that surprised you a little bit?
Piggott: Working in the financial services business for essentially my whole career, you're exposed to many different disciplines and styles and approaches to investing. But what surprised me about coming to The Motley Fool and investing style here is the emphasis that's placed on the quality of management and corporate governance. While that's important to a lot of investment professionals, earnings and price targets, usually with short-term mindsets, and margin expansion, that seems to dominate the narrative in the news. Here, that's just noise. It's all about, how's the management doing? What are they doing to grow the business for the long term? And a focus on, are they aligning their interest and shareholder interests together? I think that's the most important thing, which is really great!
Moser: One of the things we did in my analyst development program was a deep dive into a CEO of our choice. It was really to learn more about the CEO, the company that he or she was running. Everything about it. Kevin Plank was the one I chose, Under Armour. There's just a lot to learn. I think that you really hit on something there. The focus on management here is big. I don't think that'll change, either. Even bad management can run a good product into the ground. We've seen that many times. This is always an interesting perspective I get, when I ask people this -- if you had the opportunity to meet management vs. not meeting management of a company that you've recommended, what would you prefer? Would you rather meet them or not meet them?
Piggott: I would love to meet them. Yes, they're born salesmen in a lot of ways. They're kind of groomed to give off this persona. But being able to sit down directly and ask questions that are unscripted, I think you could tell a lot about a person and what their fundamental values are. If you can extract that from them, you can really make a good influence if these guys are really good people, and they're doing the right things for their shareholders, or not.
Moser: Yeah, I think that's a really good point. I was always a little bit stumped by that question. But I think I ultimately looked at it the way you do. Yeah, they're born salesman. Their job is to tell you how good the company is and how great of a job the team is doing.
But if you can look past that, and just try to find the other qualities that you could glean from that conversation, it can give you a better idea of what kind of people they are, what kind of thinkers they are, short-term vs. long-term.
Piggott: Yeah. It doesn't have to be about the company specifically. You can just ask them about their background, where they came from, how they developed in their careers. That might give you also a good sense of what their work ethic is like, how they've overcome adversity in their lives. That's important.
Moser: Yep, I agree. Given that you've been investing for a while, what is the best piece of investing advice you've ever gotten?
Piggott: Gee, I've heard all the quotes that everybody here has heard.
Moser: [laughs] "Be careful when others are greedy... "
Piggott: Buffett, of course. Bill Miller, one of them I received was, lowest average cost wins. Shelby Cullom Davis. I don't know if anybody here on the show might know, it's from the Davis Advisers. Pretty much, he said that you make most of your money in a bear market. You just don't realize it at the time.
Moser: That's a good point!
Piggott: Those are all great! I love those quotes, great investment advice! But, my mentor, when I first got in the business, he told me, and it's always stuck with me, pay yourself first. All these things that we do here about growing wealth and investing, you have to have capital to do that. And a lot of times, people get caught up in, I want that fresh new toy or that nice iPhone or the expensive car. Those are short-term gratification things. Those things feel good, but the reality is, you don't really need that. You need to be invested in yourself and your family and your financial future. Pay yourself first. Put that money away. Invest it. And over the long term, you'll be able to get whatever you want.
Moser: I like that! I've always considered myself very fortunate. I'm not much of a stuff guy. If I run into a windfall, I'm not going to go buy stuff, I'm going to go buy stocks. I would much rather own the stocks. My dad always taught me, you're never going to buy at the bottom and you're never going to sell at the top, so just get used to it and start investing. That was something that always stuck with me.
Tell us and our listeners, beyond investing, we'll talk about T.J. for a second here, tell us something interesting about you. Tell us something that has happened in your life, something unique, something you think people should know.
Piggott: I'm an adrenaline junkie.
Moser: Oh, yeah?
Piggott: Yeah, I don't know if that comes across.
Moser: What, like, bungee jumping and stuff?
Piggott: I haven't done that yet. But I love to go fast and I love to live a little bit on the edge. Not so much nowadays because I have a child. But thankfully, my wife embraced that before we had our kid. I got some really cool gifts, experiences. One is, I was able to take off and fly a single engine Cessna.
Moser: Oh, wow!
Piggott: They didn't let me land it. That's a little bit more dangerous.
Moser: Difficulty's a little bit higher.
Piggott: Yeah. But still, that was pretty cool! Also, I got to drive a NASCAR at Richmond International --
Moser: No way! How fast were you able to get it going?
Piggott: Here's the thing, they don't put the speedometer in the car. Nor do they put the rearview mirror in there, either. They want you just listen into your spotter. You're going so fast, one, day they don't want you to try to go as fast as you possibly can to one-up your buddies, because you'll put yourself in the wall. That's not good. Those cars are expensive. Two, you could hurt yourself. But it was an amazing experience!
One thing that I realized, also, is these guys are much, much crazier than I am. Because as I'm driving, it's a live course, so it's not just me on the track, it's everybody else and they stagger you out so you can't catch up. Well, they do ridealongs, ridealongs with a professional driver. And all of a sudden, my driver says, "Hit the apron." And I go down the apron. And as I'm turning down, here goes two cars speeding past me like a fighter jet. And I was like, "And I thought I was going fast, wow!"
Moser: [laughs] You got a life insurance policy, T.J.?
Piggott: Absolutely!
Moser: Good! Just checking!
Piggott: Not sure if it covers that, but, hey!
Moser: [laughs] Let's wrap this up today, you're here to talk stocks, to learn about stocks, to communicate those ideas and your learnings to our members. It's a lot of fun to do. Normally we like to wrap these interviews up with a book recommendation, but given that I've got you here today, and you're an analyst here on our team, what is a stock that you like today, and why?
Piggott: OK, I have a goodie for you. You guys ready?
Moser: Ready.
Piggott: OK, I'm really excited about a company called Globant. It's a global technology and digital consultant firm that's bringing its A game against some of the best known consulting firms in the world. Their goal is essentially to help their clients remain relevant in the digital age by creating what they called meaningful digital journeys to end customers.
Moser: Globant, never heard of it.
Piggott: It's great! It hits a lot of things that The Motley Fool cares about. It's founder-led and still controlled by four Argentinians who saw an opportunity to tap the excellent source of Latin American IT professionals, who a lot of people weren't leveraging. They have client relationships with some of the most recognized brands in the world, such as Disney, Coca-Cola, American Express, Southwest Air, EA. The list goes on and on. I think you guys get the point of who they're impacting. They've built over 300 mobile apps for smartphones and wearables. They've developed streaming platforms where billions of videos have been watched.
Moser: Smaller company, too. Looks like about a $3 billion market cap. So maybe there's a nice growth story there to tell.
Piggott: A great growth story. And let's talk about growth, because we can't forget about that. Revenue's been growing at a healthy clip. About 27% compound annual growth rate on revenue since 2014. This past year, they brought in about $522 million with a net income of around $52 million. So they're not large yet, but they're getting there.
Moser: Alright, good stuff! I'm sure that's one that most of our listeners probably haven't had a chance to dig into. That's neat. They got a good idea to this thing. T.J. Piggott, thanks so much for stopping by!
Piggott: Thanks for having me!
