For a few glorious moments, Sam S. Stewart let down his professional guard and enjoyed an uncharacteristic exchange of high fives after being named one of the nation's top mutual fund managers last week by USA Today and Financial News Network.
"I should have told everyone `Stop what you're doing. I'm taking you all out for a drink.' But I didn't. Instead I asked `What's the latest stock price?' " Stewart said in an interview Monday.So goes the mindset of the president of Wasatch Advisors Inc., a Salt Lake-based investment firm whose family of no-load mutual funds have generated handsome earnings for investors during the past four years.
Wasatch Growth turned in an impressive 24.5 percent rate of return for the 12 months ending June 30. Wasatch Aggressive Equity, named the top performing stock mutual fund in the October edition of Changing Times magazine, experienced a 33.9 percent return during the same time period.
For the year to date, Wasatch Advisors bond fund, Wasatch Income, generated an 8.9 percent return.
And while Wasatch Advisors funds have been regularly featured in the likes of Wall Street Journal, The New York Times and Changing Times, Stewart is not yet satisfied.
He is hard on himself and his employees. Even his children seldom work with him, unless they really need the money, he says. "Really?" the reporter probes. "Uh, huh," Stewart says. "I think I have been hard on my employees, too."
Stewart said he is driven to succeed because his investment strategy - investing in small growth company stock - is considered unorthodox.
Even international investment guru John Templeton, named mutual fund manager of the year by USA Today and FNN, considers small company growth stocks the world's bargains.
"Being small growth managers, we've had sand kicked in our teeth for five years. We're starting to get some of it back but we still want more," said Stewart, who holds two bachelor degrees from Northwestern University and a master's in business administration and a doctorate in finance from Stanford University. He is also a business professor in the University of Utah's College of Business.
One reason he favors small company growth-stock investment is small companies are "much less sensitive to economic cycles." They tend to grow when the earnings of big companies flatten.
Stewart says the 1990s will bring untold challenges to investment circles with the opening of the world economy. "The global economy implies I'm trying to worry about every commodity and pay special attention to companies that provide something unique," he said. He anticipates that technology and computer software will be hot prospects.
As the world economy changes, how Wasatch Advisors handles its business affairs likely will not. Research is the backbone of its business and each prospect is scrutinized as if the investment firm was buying the company.
"You realize you are really entrusted with people's futures because most of the people's money we deal with is retirement oriented," Stewart said.
Despite the firm's successes, the true test of a financial firm's grit is long-term stability. In terms of longevity, he is not yet in the same league of as Templeton or Peter Lynch. "Those people have been doing for decades what we've been doing for years."
Still, he says he's honored to be mentioned in the same breath and he believes his company has the same level of expertise as the better known, well established firms.
"Deep down, I think Wasatch Advisors is of the same quality. We are in the same level (of play). Hey, if I had to play John Templeton one on one, yeah I'm ready. Karl Malone? That's something different altogether."