Nick Griffin is the Chief Investment Officer of Munro Partners. Mr Griffin will present an investment idea at the Sohn Hearts & Minds conference in Tasmania on November 18.
The global tech giants are in the penalty box right now. After a decade of strong growth, with most of them reaching $US1 trillion in market cap, they have ultimately become more sensitive to the macroeconomy than they have been previously due to their enlarged size. As the economy slows, so too has their revenue growth.
However, what has surprised us a little is not their slowing growth but their inability to manage the cost base better in a downturn. As predominantly digital businesses, they should be able to adjust the cost base better than more traditional companies. But so far, while management has talked a good game like hiring freezes, they have continued to spend.
Meta (previously Facebook) is the most egregious example, who looks set to spend in excess of $US100 billion in corporate expenses and capex in 2023 building out founder Mark Zuckerberg’s metaverse ambitions.
While the sell-off does look overdone, the decision from here is which one of these companies can manage costs to a slowing revenue environment and ultimately improve shareholder returns. For us, Amazon and Google have the management teams and the opportunity to do this and look best placed to solve this over the coming quarters. Meta, on the other hand, looks likely to be stuck in the penalty box until the metaverse investments start to pay off … if at all.
For us, the obvious winners are utilities that will need to be incentivised to build the transition – so think the renewable power that will drive the clean economy. Here we like companies like Nextera Energy in the US and RWE in Germany.
Beyond the utilities, there are also many opportunities in electric vehicles and home generation. But the ones we are most bullish on are the forgotten ones, where some don’t realise how important they are to the transition.
Here we would flag LNG. While gas is a fossil fuel, it is essential to replace coal in countries like China, India and more recently Europe. Cheniere Energy, based in the US, is the second largest LNG exporter in the world and looks well-placed to fill this need over the coming decades.
The semiconductor stocks have been horrible in 2022 as the economy has slowed, and customers have begun to unwind the double ordering they were doing during the supply shortages in 2021. This will ultimately lead to a great opportunity to invest in an area we see as the oil of the digital economy.
A company we like but had missed in the previous semiconductor cycle is Marvel Technologies. The company focuses on networking products that are vital to how we connect to the cloud. As cloud computing grows, Marvel grows, and we see nothing to suggest this opportunity has gone over the medium term.
Short exposure is relatively small currently, but for the ones we do have, there are two main areas we are currently focused on. The first is industrials, where we think the slowing economy that has gone through housing, retail and technology stocks will ultimately lead to a slowing capex environment for most industrials.
The second area is China, specifically Chinese listed equities. While clearly not a new idea, we suspect that government policy will ultimately see capital continue to leave the country, pressuring the equity market and the ability of Chinese corporates to raise financing.
For us, it was Amazon. We are long-term supporters of the company, and while we halved our holding at the start of the year, we were looking to get bigger in the holding at some point and were hopeful that new CEO Andy Jassy would be able to show some more concrete progress towards improved profitability in the retail business.
Unfortunately, the economic slowdown and some over-investment during 2021 means it is taking longer to turn things around, and profitability shrank in the third quarter versus the second quarter. While we remain confident that Jassy can right the ship, it is taking longer than we hoped, and that was our biggest disappointment.
While we are a little late, we recently added pharmaceutical mega caps, Eli Lilly and Novo Nordisk. Both companies are at the forefront of commercialising GLP 1’s for the treatment of obesity.
Previously, pharmaceuticals were used to treat less than 5 per cent of morbidly obese patients. However, with the introduction of easy-to-use drugs such as Ozempic and Mounjaro, we now see this treatment expanding to the wider population to prevent Type 2 diabetes and the related co-morbidities.
Both companies appear to have a blockbuster on their hands here, and we are excited about the earnings growth ahead.
Lupino, Little Collins St. Richard Lodge and his team make the best crumbed veal in Melbourne and always have a good service and a good Barbera to accompany it.
Apart from the Invest in the Journey podcast from Munro, I recently started listening to a podcast called The Knowledge Project, which is full of helpful insights from experts on how to make better decisions, keep your head and continue being nice to your family when things aren’t quite going the way you want them to, which has been happening a bit in 2022!
This article was originally posted by the AFR here.
Licensed by Copyright Agency. You must not copy this work without permission.
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.