Fund Manager Zachary Savas: Auto Is A 'Sexy Market,' Informatics Will Drive The Industry

This is the second of a three-part series on

' Zachary Savas. Cranbrook Partners is an entity that strives to connect with people at all levels within organizations in order to make the businesses that they invest in phenomenal.

In

of this interview, Savas emphasized the importance of proper research for investing success. This second part explores Savas' investing philosophy in action.

We try to distill everything to return on investment. Businesses that need our input – whether it's due to inefficiencies in operations, management or another reason – are usually our next targets. We like to be active in our businesses; that way we feel like we are valuable as partners. In our automotive company, Production Spring LLC, if we invested a hypothetical $100,000 in equity, we can get $400,000 in sales. Companies with low capital requirements and companies with high profit margins where we can get our investment back quickly will always be attractive candidates.

The decision to invest in Production Spring was market driven. My partner and myself wanted to own a large automotive parts manufacturer in Michigan, and the market presented Production Spring as a great option where we could step in and turn operations around using our financial knowledge, making its business more efficient. Iwerk was unique in a sense that we determined that the company had hit its artificial ceiling for growth. It was a profitable business doing networks and custom software. They tried a number of things over a four-year period and weren't able to grow. We liked that challenge and we have tripled the company since 2004.

I think auto is a sexy market for a lot of people, because of the volume of cars. When you are producing 17 million vehicles a year, if you can get a $5 part on each of those cars, your company can see sales of over $40 million.

After the crisis in 2009, companies such as

,

, etc. have worked more with the supplier base than they ever have. The OEMS are looking for more of a long term quality in the products that they are producing because their reputation depends on it. The biggest driver in the industry will be

. For example,

bringing WiFi to their cars, and this is just a start. The next generation will be continuing to make the new technologies more affordable. I would say that the industry is the most competitive that I have seen in my career; it is a lot of fun to be a part of it.