Fund managers presenting to Sohn Hearts & Minds 2022 conference are picking stocks that business models are built around enabling the success of other companies as well as those capitalising on major demographic shifts.
Fundamentally the stock pickers remind us to always keep the investment proposition reasonably simple.
That is, to back businesses that have a path to earnings and cashflow growth and buy these stocks at an attractive entry point – in other words businesses that are seriously unloved and their valuations have been knocked down by the market.
The concept behind Sohn Hearts & Minds – dubbed a Woodstock for investors – is relatively simple. Leading fund managers find their best stock idea and pitch it like a speed-dating exercise to hundreds of big fund managers, super fund and investors. The returns on offer for the pitches can’t be ordinary; they need to be extraordinary and the investment case behind the pitch needs to be compelling.
All proceeds from Sohn go to medical research with more than $40m raised since the event started in Australia in 2015.
But the conference also offers important clues about where the top investors believe real opportunities can be found. And here the market is rapidly changing.
One thing, glamour technology stocks are long gone. So too are those playing on pandemic disruption, while capital intensive industrial players are also out.
A recurring theme among fund managers is defensive technology.
Even with a technology crash, demand for technology and services are ever growing. Joyce Meng, the New York-based founder of hedge fund FACT Capital says Anglo-Irish tech company Keywords Studios serves as “the picks and shovels” to the $US250bn ($370bn) video game industry.
Keywords do all the outsourced art, engineering, functional testing and so on that goes into high-end complex games. And global video game publishers are only just beginning to tap into outsourcing opportunities as they face an arms-race in spending on development and innovation.
Playing into this theme is Nick Griffin the founding partner of Munro Partners points to Dutch-listed company ASML which owns the tools that squeezes transistors on microchips. It has an essential monopoly on the cutting-edge technology which sits in a box that sells to chip manufacturers for as much as 300 million euros – the cost of a commercial aeroplane. Elsewhere California-based New Relic provides deep monitoring services to ensure a company’s app or website is running smoothly.
Governments can make or break business, so the role of regulatory tailwinds can’t be underestimated.
Cooper Investors founder Peter Cooper points out ever increasing regulation is playing into the hands of French lab player Eurofins which does 450m tests a year. Regulation around food to air quality is increasing 10-fold and driving up Eurofins’ testing and certification demand. Otherwise Jun Bei Liu of Tribeca says Hong Kong-listed China Tourism Group dominates the Chinese duty free market.
A regulatory shift means more Chinese are travelling internationally and including to the duty free haven of the “Hawaii of China” the Hainan province. For both this leads to a situation where there is regulated demand but unregulated profits.
It’s also worth taking another look at what is right in front of you. This is known as the JB Hi-Fi trade (The retailer was nominated by Tim Carleton of Auscap Asset Management in 2018). Since then JB Hi-Fi has piled on 84 per cent. Here household names that have been looked over by the market deserve another look. A reinvention of their business model is often a good reason to take a fresh look.
Carleton this year points out car listing company carsales.com.au given its high margin and international push. Claremont Global’s Bob Desmond says sportswear giant Nike Inc is improving its margins by selling direct to consumers, taking back the profits that once went to external retailers. Even under pressure wealth manager AMP is trading well below its potential with all the businesses under its brand offering billions of dollars of returns under a potential break up.
Finally, market opportunities exist outside Australia. The ASX represents just 2 per cent of the world’s equity market by capital which shows the scale of opportunity. Fund managers are looking at thousands of stocks on NYSE and Europe and even more opportunities through Asia.
This article was originally posted by The Australian here.
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Two hundred of Australia’s best and brightest money managers, bankers and entrepreneurs toasted the seventh Sohn Hearts and Minds conference at David Walsh’s Museum of Old and New Art, better known as MONA, in Hobart on Thursday night.
Fund manager turned anti-corruption campaigner Bill Browder is advising investors to hang on to their cash until central banks stop raising interest rates and the cost of living starts to come down, before investing it strategically.
The Sohn Hearts & Minds Investment Leaders Conference, held annually, had before Friday’s event made more than $40m in collective donations to medical research. It applies the stock picks made by fund managers in an investment portfolio.
Professional gambler and arts impresario David Walsh had a brutal message for successful top money managers – you may just be lucky.
Technology behind the tech; healthier lifestyles; the green transition and regulatory tailwinds. These are the mega-themes the smartest minds in the market are now firmly getting behind which they believe can help them deliver outsized profits.
A room filled with 700 of the country’s financial luminaries and billionaires is a difficult place to pitch an investment idea but it’s a great place to raise money for charity.
Top global money managers are telling investors to steer clear of companies that don’t make money and invest instead in unloved but profitable businesses, as continuing central bank interest rate rises threaten to keep markets falling.
Perpetual’s star stock picker Anthony Aboud says companies with strong balance sheets will finally be rewarded for their discipline in an environment of rising interest rates and global market upheaval.
Perpetual’s top stock picker Anthony Aboud makes his money running against the crowd and this is why property trusts like Charter Hall are sitting right the top his list right now.
Some of the top fund managers in the country will on Friday pitch their best investment ideas to the Sohn Hearts & Minds conference.
Twenty students from Kingston High School have been given the opportunity to attend the prestigious Sohn Hearts & Minds conference this week.
Gerry Cardinale, the owner of AC Milan and a host of other soccer, cricket, baseball and ice hockey assets is trying to double his money in the ‘resilient’ asset class.
Carleton’s conviction will be on full display on Friday, when he makes his third appearance at the annual Sohn Hearts & Minds Investment Leaders Conference, where stock-pickers share their best ideas in the name of medical research.
James Miller, a portfolio manager at Firetrail Investments, believes investors need to stop seeing the global decarbonisation push as a risk – and start seeing it as an opportunity.
Maggie O'Neill, Head of Marketing and Operations at HM1 joined Nick Griffin, CIO of Munro Partners to discuss the history of Hearts & Minds, Munro Partners' involvement and Nick's upcoming stock pitch.
Bob Desmond is Head of Claremont Global and Co-Portfolio Manager. He will present at the Sohn Hearts & Minds Investment Leaders Conference in Tasmania on November 18.
An increasing intransigence from authorities in Beijing toward private enterprise - and harsh pandemic restrictions - might be keeping some investors away, but the same factors are creating good opportunities in Chinese stocks.
Joyce Meng is a presenter at this year’s Sohn Hearts & Minds Investment Leaders Conference on November 18, which takes place in Hobart and aims to raise money for medical research.
Founder, CIO and CEO of Eminence Capital Ricky Sandler talks about his journey launching the $5.7 billion dollar asset manager, how the market has changed over the past decade and his motivations for participating in this year's Sohn Hearts & Minds conference.
Munro’s Nick Griffin on why he prefers Alphabet and Amazon over Meta, shorting industrials and Chinese equities, and his top picks for the energy transition.
When Auscap Asset Management founder Tim Carleton tips a stock at this month’s Sohn Hearts & Minds conference in Hobart, he doubts it will be a name that shocks investors.
The veteran fund manager says the most uncertain period of his career will deliver huge opportunities – providing his firm can stick to its system.
One of the nation’s most influential fund managers has warned that investment markets have entered a “new phase”, with hidden risks in the form of debt sitting in super funds, private equity and big investors that is set to test the financial system.
Speaking to The Australian Financial Review before the Sohn Hearts & Minds conference, Sandler named global on-demand ride-sharing and food delivery service Uber Technologies among his top picks, alongside real estate marketplace Zillow.
When former Amcor chief executive Ken MacKenzie was named the new chairman of BHP five years ago, that was a sign for top-rated fund manager Peter Cooper to move back into the mining giant.
Jun Bei Liu is the lead portfolio manager at Tribeca Alpha Plus Fund. Ms Liu is set to present an investment idea at the Sohn Hearts & Minds conference in Tasmania on November 18.
Regal’s hedge fund focused on the resources space has thumped the market and its top stock picker, Tim Elliott, says resources stocks are still cheap.
Desmond, who worked in London before moving to Australia in 2008, is making his first appearance at the annual Sohn Hearts & Minds Investment Leaders Conference, where fund managers give their favourite stock tips to raise money for medical research charities.
The WaveStone principal says retail will drop away but quality operators will find a way through.
Catherine Allfrey, Principal and Portfolio Manager of WaveStone Capital will be speaking at this year's Sohn Hearts & Minds Conference in Hobart which raises funds for Australian medical research.
Bill Browder, the fund manager who has become one of Vladimir Putin’s fiercest critics, says the Russian leader is increasingly desperate, but no less dangerous.
Bill Browder, once the largest foreign investor in Russia and the man behind the global Magnitsky justice campaign, says the US is the weakest link in the war in Ukraine.
There are many descriptors for Browder, including Russia’s anti-corruption crusader, and its most dogged oligarch hunter. But it’s his title as Putin’s No.1 foreign enemy that bestows on him another label - consummate survivor.
On November 18, Griffin – with $4.7bn under management at Munro Partners – heads to Hobart for this year’s face-to-face pitch to investors on his 2023 pick.
Tim Carleton, founder of Auscap Asset Management and 2022 Conference Fund Manager sat down with Equity Mates to discuss his investment philosophy and what makes a great Australian company.
When investor Kara Nortman and actor Natalie Portman decided to start a soccer team, they created a brand that has grabbed the sporting world’s attention.
Sporting teams and leagues are becoming serious investments for global firms managing billions of dollars, as private equity funds eye off the sector’s growth potential and resilience to economic slumps.
Australia’s sports leagues are being held back by a culture of conservatism and need to be more open to private equity investment or risk falling behind, investors say, with Netball Australia’s rejection of a $6.5m bailout cited as just one example of administrators’ aversion to private capital. Conservative Australian sports leagues are ‘letting investment opportunities pass them'.
A financier and political activist who is viewed as a key enemy of Russia’s government will address Australian investors on the war in Ukraine at this year’s Sohn Hearts and Minds conference, as the conflict continues to have a major influence on global markets.
Keynote speaker will be Bill Browder, the former Hermitage Capital hedge fund manager that has become an arch nemesis of Russian President Vladimir Putin, as he has lobbied governments to black-list senior Russian officials attempting to shift their assets offshore.
Bill Browder, one of Russian President Vladimir Putin’s fiercest critics, the founder of Hermitage Capital and the man behind the Magnitsky Law on human rights, will headline this year’s Sohn Hearts & Minds investor conference.