Bill Gunderson

Shareholders are a pain to some CEO’s. Always asking for profits and returns for their stake in the company.

Some CEO’s resent that. They want time – usually two years – to show what geniuses they have really been for the last five years despite their seemingly dismal results.

Patience, they plead.

Forbes magazine summed up the attitude well earlier this year, when one of its columnists, Keld Jensen, said if he ever became a CEO, he would send out the following letter:

“I don’t care what the share value will be for the next two years. We might not make a profit during this period. But we are going to focus all our resources on product research and development with the goal to create the best product the world has ever seen. We’re here to change the world!”

I’m sure Mr. Jensen is a very nice person and he probably likes puppy dogs. But if I ever see his name on the masthead of a company I happen to own – however small my piece – I am going to sell straight away.

I will not pass Go. I will not wait to collect $200. Sell. Sell. Sell.

As a shareholder, the only world I want a manager to change is mine – the owner.

If a CEO wants to work in an environment where he can do anything he wants and no one will notice for two years, I suggest he get a job running the Department of Energy.

Until then, I like companies with CEO’s who remember who runs the company. And who owns it. And how never the twain shall meet.

Google is one place with a lot of folks who scorn the ‘let’s make money for the shareholders’ idea. And their share prices show it. Same with Wal-Mart: They used to be on a mission to charge low prices to create high profits.

Then six years ago, someone decided they needed to start squeezing the carbon out of Wal-Mart’s supply chain. They also squeezed out profits.

At Ocwen Financial (OCN), you won’t find any executives talking such silly stuff. And their prices show it too. So much so, OCN is today the #1 rated stock in my Best Stocks Now app.

I have owned and talked about Ocwen many times over the last several years. Ocwen provides residential and commercial mortgage loans servicing as well as asset management services. And OCN has been growing its earnings over the last five years by 35% per year!

Performance

Over the last ten years, OCN has delivered 35% per year while the market has delivered 5% to investors. Over the last five years, OCN has delivered 67% per year while the market has delivered 6%. Over the last three years, OCN has delivered 82% per year while the market has delivered only 15% during the same time.


Bill Gunderson

Bill Gunderson is the CEO and Chief Market Strategist of Gunderson Capital Managment in San Diego, CA. He is also a professional money manager, former research analyst, author of Best Stocks Now. http://www.pwstreet.com