Michael K. Farr Biography
Michael Farr is an American author, CNBC contributor, and president of the DC investment advisory firm, Farr, Miller, & Washington. He has written three books, A Million Is Not Enough: How to Retire With the Money You’ll Need, The Arrogance Cycle, and Restoring Our American Dream, which came out in 2013.
Michael K. Farr Age
Michael Keough Farr was born on 24th April, 1961, Chevy Chase, Maryland, U.S.
Michael K. Farr Height
He stand at a height of 5 feet and 7 inches tall.
Michael K. Farr Education
Mr. Farr is a graduate of the University of the South in Sewanee, Tennessee.
Michael K. Farr Nationality
He is an American nationality.
Michael K. Farr Parents
He has not shared any information about his parents to the public.
Michael K. Farr Siblings
He has not disclosed details regarding his siblings.
Michael K. Farr Wife
He is married to his wife Laurie Fishburn.
Michael K. Farr Children
He lives a low profile life therefore he has not revealed details about his children.
Michael K. Farr CNBC
Michael K. Farr is President and CEO of Farr, Miller & Washington, LLC, a Washington, DC-based wealth management firm, where he chairs the Investment Committee and is responsible for overseeing the day-to-day activities of the firm.
He also serves as Chief Market Strategist for Hightower Advisors, a $130 billion investment advisor based in Chicago, with offices in 34 states. Prior to founding Farr, Miller & Washington in 1996, he was a Principal with Alex, Brown & Sons.
Mr. Farr is the longest serving paid contributor for CNBC television. He was a regular contributor on Wall $treet Week on public television and National Public Radio’s Early Morning Edition. He has also appeared on The Today Show, Good Morning America, NBC’s Nightly News, and the Nightly Business Report.
He is also heard on Associated Press Radio, CBS Radio and National Public Radio. He has been quoted in The Wall Street Journal, Forbes, Fortune, The Financial Times, The Washington Post, Businessweek, USA Today, and many other publications. He hosts a weekly podcast, the FarrCast, available on Apple Podcasts and all other major platforms for worldwide distribution.
Mr. Farr is a highly sought-after speaker who focuses on topics such as investing, retirement, the current economic situation, the Federal Reserve, and much more. He has presented nationally and internationally alongside Federal Reserve presidents, financial leaders, and economic forecasters.
Mr. Farr is an award-winning author of three books. The first, A Million Is Not Enough, was published by Hachette Book Group USA in 2008. That was followed by The Arrogance Cycle, released in September 2011 by Globe Pequot Press.
His third book, Restoring Our American Dream: The Best Investment, was released in March of 2013 by Headline Books Inc. and received a Finalist Award from the Next Generation Indie Book Awards in the Current Events/Social Change category.
Mr. Farr is a member of the Economic Club of Washington, DC, National Association for Business Economics, The World Presidents Organization, International Atlantic Economic Society, and The Washington Association of Money Managers.
Mr. Farr founded the Sibley Memorial Hospital Foundation and has served as a trustee of Sibley Memorial Hospital since 2004. He also serves as Chairman of HEROES, Inc., a non-profit that supports the spouses and children of law enforcement officers and firefighters who gave their lives in the line of duty to the greater Washington, DC community. He is a director of the Forum Club of Southwest Florida.
He formerly served as Vice Chairman of the Salvation Army, Chairman of the Travelers Aid Society, and a trustee of Sewanee, the University of the South, Ford’s Theatre, Nation’s Capital Progress Foundation, the Paul Berry Academic Scholarship Foundation, and Neediest Kids.
Michael K. Farr Stock picks
Farr make each investment with the intent to hold the position for a period of 3 to 5 years. Below are some of the areas to invest on:
1. FedEx (FDX)
FedEx stock has been volatile over the past couple of years. The stock performed exceedingly well in the second half of 2020 as e-commerce package volumes surged during the Covid-related shutdowns. However, it became obvious during 2021 that Covid-related supply-chain bottlenecks and labor shortages were more than the company could effectively navigate without incurring significant expenses.
The stock reacted negatively to these developments and dramatically underperformed during 2021. However, now that the company has made significant investments in capacity expansion and network density, we expect its future performance to reflect the bullish demand environment.
The demand strength is evident in the huge growth in package volumes as well as the price increases that the company is easily able to pass on to its customer base. As industrial production, global trade and labor availability gradually begin to improve, the company should be able to post strong, consistent volume and revenue growth, market share gains, and very strong earnings leverage.
In the meantime, we think the company’s discounted valuation (11.6x CY22E EPS) relative to both the S&P 500 and its major competitor, UPS, provides downside protection. We believe patient investors will be rewarded by establishing positions at current levels. The yield is 1.3%.
2. Truist Financial (TFC)
Truist was formed by the recent merger of banks BB&T and SunTrust. The merger created the sixth-largest bank holding company in the U.S., by assets and deposits, while also forming a banking powerhouse in the high-growth Southeastern states. We were supporters of the merger as it will yield a large amount of expense synergies and provide the resources to accelerate investments in transformative technologies.
The merger should also lead to significant revenue synergies and enhanced diversification as each legacy bank cross-sells its respective products and services. Once it is fully integrated, we expect Truist to generate industry-leading expense efficiency and returns on equity, allowing for a higher valuation multiple on a price-to-book, or P/B, basis.
Because the integration has been managed by BB&T Chief Executive Kelly King, who has executed numerous integrations over his career, we know that it was done in a disciplined and conservative way.
Finally, the earnings accretion from the integration should act as an engine for earnings growth even if the operating backdrop remains difficult, i.e., low interest rates, subdued economic growth. We believe the stock is attractively priced, especially given that earnings growth should handily outpace the peer group as the integration is completed.
3. Apple (AAPL)
Apple is the world’s most valuable company by market capitalization. It designs, develops and sells electronic devices, computer software and online services. Devices include iPhone, iPad, Mac, Apple Watch and AirPods. Apple exercises control over the hardware and software on its devices creating a consistent user experience across devices and services.
The iPhone segment is still the largest contributor to revenue and earnings, but Services is the fastest-growing and highest-margin business. When Apple enters a product category it often captures the attention of the masses. We think that will happen again in 2022 if, as expected, Apple releases its first augmented reality/virtual reality, or AR/VR, device.
Looking further into the future, we see double-digit EPS growth through mid- to high-single digit revenue growth combined with a steady to increasing margin and share repurchases as the company moves toward a cash neutral balance sheet position. Shares trade at around 30x CY22E EPS.
The company has a rock-solid balance sheet and returns significant amounts of cash to shareholders each year. We see growth in the installed base continuing with increased penetration of “halo” products and services such as the Watch, AirPods, Music, TV+, Arcade, Fitness+, News+ and iCloud.
4. Donaldson (DCI)
Donaldson is a global manufacturer of filtration systems and replacement parts for engines in on- and off-road trucks and heavy machinery for the transportation, construction, agriculture and mining industries, as well as in industrial plants, gas turbines and other applications.
The company has dominant market share in many of its businesses, which are very diverse by geography and end market and have attractive long-term secular growth potential. The company is also looking to aggressively expand its addressable market in life sciences, and it has already completed its first acquisition in the space.
The company has a razor/razorblade model that results in well over half of revenue and income coming from aftermarket replacement filters and services, as compared with filters produced for new equipment.
The company just completed a three-year investment cycle that should result in a boost to cash flow and margins. Management runs the business for the long term, and so it will continue to invest at the cost of some near-term performance. Finally, the balance sheet is very strong and free cash flow generally approaches net income on an annual basis.
Lastly, the company has paid a quarterly dividend every year for more than 60 years, and the dividend has increased annually for 24 years in a row. The stock trades at a market multiple (20.9x CY22E) compared with a historical average of about a 27% premium.
5. Disney (DIS)
The Walt Disney Company is one of the most prestigious brands in the world. Over the past 98 years, the company has evolved from a small animation studio to a vertically integrated media and entertainment conglomerate. Disney+, the company’s streaming platform, has amassed nearly 120 million subscribers in the first two years since it was launched, putting it in direct competition with Netflix’s roughly 215 million subscriber base. However, Disney’s stock has been pressured as the momentum in subscriber growth has slowed in recent months.
Management is guiding for 240 million to 260 million subscribers by the end of its 2024 fiscal year, but the company won’t achieve this target in a linear fashion. We expect subscriber growth to improve over the next few quarters as the service is launched into new markets and as original content that was delayed due to the pandemic is added to the service. As for the legacy businesses, the theme parks have seen an uptick in recent months, and that should continue given the pent-up demand for travel and experiences.
Movie theaters have been slower to recover, but we expect demand to be the strongest for tentpole films, as seen by the release of “Spider-Man: No Way Home.” Disney shares trade at 33x CY22E EPS, which is above historical levels. However, if we exclude the losses from the streaming segment, the multiple for the legacy business is trading below historical averages. The company suspended its dividend to pursue growth opportunities.
6. Mondelez (MDLZ)
Mondelez International is a leading food and beverage manufacturer that was spun off from Kraft in 2012. The company has broad geographic reach with operations in Europe, North America, Latin America, Asia, the Middle East and Africa.
Since taking the helm in 2017, CEO Dirk Van de Put has introduced a variety of strategic initiatives that have improved Mondelez’s competitive position, including: 1) investments in its brands to drive higher market share, 2) a decentralized organizational structure that allows for more efficient decision-making, and 3) investments in the supply chain, which have proven to be a competitive advantage during the pandemic.
Recently, the company has been able to offset inflationary pressures, thanks to its pricing power and productivity initiatives. Additionally, there is very little private label competition in sweet snacks and chocolate, which is 80% of total revenues.
That means consumers are less likely to trade down when prices rise. A strong balance sheet and steady cash-flow generation allow the company to pursue tuck-in M&A as management looks to expand into higher-growth category adjacencies, e.g. cakes/pastries, premium snacks and “better for you”.
The stock trades at 21x CY22E EPS – a mid-teens discount to other multinational CPG companies, e.g., PepsiCo, Coca-Cola, Procter & Gamble, and Colgate-Palmolive. Over the long term, we would expect Mondelez to generate double-digit total returns, consisting of high-single digit EPS growth and the 2.2% dividend.
7. Ross Stores (ROST)
Ross Stores is the second-largest off-price apparel and home fashion retailer in the U.S. The company has more than 1,900 stores under the Ross Dress for Less and dd’s Discounts banners. It’s one of the few retailers growing its store base.
Unlike most specialty retailers and department stores, Ross does not require fashion or product innovation to drive profits. Instead, access to cheap inventory and the quick turnover of that inventory allow the company to leverage operating costs. This results in a “treasure hunt” experience whereby a different assortment of merchandise is on display each time a customer visits the store.
The low prices and “treasure hunt” environment drive repeat visits and are difficult to replicate in an online setting. We see continued opportunities for Ross to gain market share following the record number of retail closures in 2020. Additionally, the company should benefit as consumers look to trade down in this inflationary environment.
The stock trades at 21x CY22E EPS, which represents a slight discount to the S&P 500, compared with its historical average of a mid-teens premium. Long term, we would expect Ross to generate a low-double digit total return, consisting of double-digit EPS growth and the 1% dividend.
8. Medtronic (MDT)
Medtronic is the largest pure-play medical device manufacturer in the world. The company is diversified across several end markets, including cardiovascular, medical surgical, neuroscience, and diabetes. CEO Geoff Martha has implemented several initiatives that should transform Medtronic into a faster-growing, more efficient company.
MDT has launched more than 180 products across key geographies over the past 12 months, and the pipeline remains robust, with multiple opportunities at high-growth markets such as robotics, renal denervation, diabetes, and AF ablation.
The stock has been under pressure in recent months due to a few pipeline setbacks, as well as industrywide headwinds that have led to lower procedure volumes. However, at about 17x CY22E EPS, Medtronic is one of the cheapest large-cap medical device manufacturers.
The company should be able to achieve double-digit total returns, consisting of high single-digit EPS growth and the 2.5% dividend. Finally, Medtronic has one of the strongest balance sheets among its med tech peers, and the company generates very strong cash flow. This will allow management to pursue tuck-in acquisitions to complement its current and future product portfolio.
9. Raytheon Technologies (RTX)
Raytheon Technologies was formed through the combination of Raytheon Company and the legacy United Technologies aerospace and defense businesses. The merger created a powerhouse in the A&D industry, but management’s near-term sales and profit targets for the combined entities have been pushed out because of the Covid-19 crisis.
The crisis took an enormous toll on the commercial aerospace industry as steep production cuts at Boeing and Airbus combined with a massive drop in airline passenger miles. Fortunately, the defense side of the new company, which contributed 65% of total company pro forma sales in 2020, is doing just fine.
The defense side should provide downside protection and steady cash flow, allowing the company to continue investing in R&D during this crisis and any future downturns. As conditions improve on the commercial side, the company should start to benefit from aircraft production increases as well as greater aircraft utilization.
Furthermore, the growing installed base of the company’s groundbreaking geared-turbofan, or GTF, engine, combined with a rebound in aircraft utilization, will contribute to a growing stream of high-margin and high-visibility aftermarket revenue.
Finally, we also expect the company will ultimately reap huge cost and revenue synergies from the ongoing integration of both Rockwell Collins and the Raytheon Company.
The synergies will help the company return an expected $20 billion in capital to shareholders in the four years following the merger. The stock offers strong value at about 17x CY22E EPS — a significant discount to the overall market. The dividend yield is also highly attractive at 2.5%.
10. Visa (V)
Visa is one of the world’s leading payments technology companies. The company continues to pursue its network-of-networks strategy, connecting individuals and businesses across the globe. In addition to facilitating payments, the company provides merchant clients with a broad range of products, platforms and value-added services.
We still see a long runway for growth in electronic payments with business-to-business payments as an opportunity to significantly expand its addressable market. We think the threat from “buy now, pay later” is overblown as up to 80% of those using such services pay off their balance using a debit or credit card, resulting in Visa revenue being as much as or greater than if the network had been used on the initial purchase.
The balance sheet is solid, we expect a recovery in personal travel over the next several years, and secular tailwinds from cash-to-card and digital should continue. Shares trade at about 29x CY22E EPS. We expect EPS to grow in the low teens over the next several years.
Michael K. Farr Salary
He earns an estimated annual salary of USD 100,000.
Michael K. Farr Net Worth
His net worth is estimated to be USD 1 million.
Michael K. Farr Instagram
Michael Farr (@mifarr)