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Wall Street Transcript
Institutional Pharmacy Provides Value Investors With Opportunity
Thursday November 19, 8:11 am ET

67 WALL STREET, New York - November 19, 2009 - The Wall Street Transcript has just published its TWST Small Cap Value Report offering a timely review of the sector to serious investors and industry executives. This 62 page feature contains expert industry commentary through in-depth interviews with Portfolio Managers. The full issue is available via The Wall Street Transcript Online.

Topics covered: Small-Cap Value - Capital Preservation - Sovereign Bonds - Precious Metals - Value-Investing - Companies with International Exposure - US-listed Chinese Companies - Risk Limitation - Industry-Diversified Portfolios - Long-Term Value - Micro-Cap Companies - Turnaround Situations - Strategic Buying - Fundamental Analysis

Companies include: Bridgepoint Education (BPI); Compass Minerals (CMP); Flexsteel (FLXS); General Electric (GE); Gold Miners ETF (GDX); Hardinge Corp (HDNG); Northgate Minerals (NXG); Phillips-Van Heusen (PVH); Potash (POT); Adobe (ADB); Affiliated Computer Services (ACS); Agrium (AGU); Alliance Data Systems (ADS); American Society of Civil Engineers (ASCE); American Water Works (AWK); Atlantic Tele-Network (ATNI); Avnet (AVT); BHP Billiton (BHP); Celanese Chemical (CE); CenturyTel (CTL); Cisco (CSCO); Clean Energy Fuels (CLNE); Consolidated Graphics (CGX); Dell (DELL); Dell Inc. (DEL); Dillard's Department Stores (DDS); Drew Industries (DW); Educational Development Corporation (EDUC); First Acceptance Corp (FAC); Forestar Group (FOR); Freeport-McMoRan Copper & Gold Inc (FCX); Fresh Del Monte (FDP); Garmin (GRMN); Goldcorp (GG); Hain Celestial (HAIN); Harbin Electric (HRBN); Huron Consulting (HURN); IBM (IBM); IMAX (IMAX); IMS Health (RX); Intel (INTC); John Deere (DEE); Kennametal (KMT); Kraft Foods (KFT); Lamar Advertising (LAMR); Mettler-Toledo (MTD); Microsoft (MSFT); Minefinders (MFN); Monsanto (MON); Mosaic (MOS); NBTY (NTY); Nature's Sunshine Products (NATR); Newmont Mining (NEM); Nobility Homes (NOBH); Omnicare (OCR); Omniture, Inc. (OMTR); Perot Systems (PER); Pfizer (PFE); Puplava Financial Services, Inc. (PFS); Puplava Securities, Inc. (PSI); SPDR Barclays Capital International Treasury Bond Fund (BWX); SPDR Gold Trust (GLD); Silver Wheaton (SLW); Syngenta (SYT); Tellabs (TLAB); Temple-Inland (TIN); Tempur-Pedic (TPX); Tesoro (TSO); Valero (VLO); Verizon Wireless (VZ); Whole Foods (WFMI); Xerox (XRX); Yamana (AUY).

In the following brief excerpt from just one of the in depth interviews in the Special Report, a top tier money manager discusses the outlook for the market for investors.

Carl Gardiner is a Portfolio Manager on the Small Cap Value Equity Fund. Mr. Gardiner has been a financial analyst for over 18 years, including eight years in investment analysis and management. Prior to joining Schafer Cullen Capital Management, he was an investment analyst and portfolio manager at two research-driven, value-oriented investment funds, Copper Arch Capital and North Sound Capital. From 1992 to 2000, he was a Director at Merrill Lynch, as an investment banker in New York and London. Mr. Gardiner began his career at Fox Asset Management, a value-oriented money management firm. He received a MA degree in International Economics from Johns Hopkins School of Advanced International Studies in 1992 and a BA degree with High Honors from the University of Virginia in 1989.

TWST: Would you be able to give us any examples of the type of companies that are like core holdings or new acquisitions?

There are far fewer of those just lopsided, obviously mispriced opportunities, so we are now back more into our normal mode of finding situations that are overlooked. In this vein, the last stock I'd mention is our most recent purchase, Omnicare (OCR). Omnicare trades at a little over 9 times 2009 earnings, with a $2.8 billion market value. Omnicare is the largest institutional pharmacy in the US, serving skilled nursing facilities and assisted living facilities, with a 50% share of this market. There are some interesting things going on at Omnicare that have great potential to boost returns over the next two to three years. Most importantly, having consolidated the industry, the company is finally taking advantage of its scale. Omnicare is nearly through an initiative to automate and centralize certain repetitive functions, so that it can downsize its over 200 regional pharmacies saving over $100mm a year in costs and freeing resource for customer retention activity. Omnicare has a number of other cost-saving initiatives underway as well. Finally, the wave of branded drugs going generic gives Omnicare a gross profit lift, and while this has been underway for the past few years, there is still some runway here. Those are a few examples I would give of how we apply the strategy.

CARL GARDINER

Schafer Cullen Capital Management, Inc.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 62 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

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