Frank Sells 70% Stake in Acclaimed Newsletter
Al Frank, one of the nation’s top-ranked investment newsletter writers, said Friday that he has sold a 70% stake in his Laguna Beach-based company 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.
Despite his lack of formal investment training, Frank’s newsletter advice has been lucrative for investors and his market views are often quoted in the financial press.
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 some 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 reverse that trend with increased marketing of the newsletter--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 is leading the group that bought the company. The sale price of the majority stake was not disclosed.
Dlugosch, 34, will take over as president of the company, Al Frank Asset Management Inc., working from a new office in Minneapolis.
Frank, who has signed a five-year employment contract, will become chief investment strategist. He also retains a 10% stake in the company.
John J. Buckingham, 34, who has been helping Frank run the company, will become chief portfolio manager and co-editor of the Prudent Speculator. Buckingham will retain the 20% stake he previously acquired in the company.
Dlugosch, formerly with Minneapolis-based Miller & Schroeder Financial, said he plans to make no changes in the business, which he said will remain based in Laguna Beach.
