Al Frank Sells a Controlling Stake

Al Frank, one of the nation’s top-ranked investment newsletter writers, has sold a 70% stake in his Laguna Beach-based company, Al Frank Asset Management Inc., to a group of Minneapolis investors.

Frank, 69, will continue to write the newsletter, the Prudent Speculator, and help run the company’s small-cap mutual fund and its private investment accounts, which manage about $60 million.

“I’ll be doing many of the same things I do now,” said Frank, who has been overseeing the business from his home in Santa Fe, N.M. “I just won’t have the day-to-day responsibilities. It’s been a good run for 22 years.”

Frank founded his newsletter in 1977 after being bitten by the investment bug while studying for his doctorate in education at UCLA. His investment philosophy consists primarily of finding undervalued stocks and waiting patiently for prices to rise.

The Prudent Speculator was ranked the No. 1 investment newsletter, on a total return basis, for the eight-year period ending Sept. 30, according to Hulbert Financial Digest, which ranks investment newsletters.

But in recent years, Frank’s investment strategy has lost followers, particularly as the market has focused less on fundamental financial analysis and more on fast-moving Internet and technology stocks. Frank’s newsletter dropped from about 6,000 subscribers last year to 3,000 today.

The new owners hope to change that trend with increased marketing--something Frank rarely did.

“We’re excited about introducing his philosophy to more and more people,” said James J. “Jamie” Dlugosch, an Minneapolis investment banker who leads the group that bought the company. The sale price was not disclosed.

Dlugosch, 34, will take over as president, working from a new office in Minneapolis.