Wednesday , October 20 2021

Sohn Hearts and Minds 2018: The most important investment tips from leading fund managers


Leading fund managers gathered at the Melbourne Hamer Hall for the third Australian Sohn Hearts and Minds investment leaders conference. Here are their best ideas:

Paul Mason, Paradice Investment Management: Lear Corporation (LEA: NYSE)

Paul Mason of Paradice Investment Management describes Lear, a yanlış deeply misunderstood job yanlış in car seats and car e-systems. In addition to switching to E-vehicles and driverless vehicles, the SUVs are well positioned to take advantage of mega trends, including automotive trends that are closer to the sedan.

Mason says that the biggest player in the luxury market, Lear, has more than 30% to 40% of production seats for SUVs, rather than sedans, as it has more features than it does with more features. In addition, the customer base is very loyal because even though the vehicle is an important part of the safety features, they make up only 2% of the cost, which makes the costs of manufacturers a low priority.

Paul Mason, Lear who makes car seats and car e-systems

Paul Mason talks about Lear, who makes car seats and car e-systems "deeply misunderstood."

Jim Smithson

But Mason's most excited part is the so-called "e-systems". Lear is the only supplier with complete electronic architecture from design, application and production to assembly. In addition to giving the company insight into trends between five and seven years, the company estimates that most of its profits will come from technology as of 2023 by 34 percent.


This is partially written by about half of the vehicles expected to be electric or hybrid by 2028, which means it is five times the market growth. . Lear can increase content by 500 percent per vehicle, "he said. Mason, the company's capital allocation for the last five years, "almost perfect," he said. And he says the company is cheap in its seven time savings, even the slowdown in China and the decommissioning of Volkswagen's Dieselgate are accounted for.

Alex Waislitz, Thorney Investments: Austin Engineering

Mr. Waislitz from Thorney, a well-placed, well-capitalized and well-placed Australian small-scale mining company established Austin to provide significant share price increases. Thorney's share in mining services was 22 percent and its market value was $ 120 million.

The company refused to take over $ 350 million from Bradken, but then the mining explosion ended and the crisis quit.

Alex Waislitz Austin - a well managed, well-capitalized Australian small cap mining company

Alex Waislitz Austin – a well managed, well-capitalized Australian small cap mining company

The company has since been recapitalized and Thorney claims that large coal, copper and iron ore miners delaying maintenance spending will return to Austin, which produces dump truck bodies and mining equipment.

"When prices are low, maintenance is postponed and pushed equipment to the limit," Waislitz said. Said. Değiştiril But the equipment should be replaced. It's happening now and Austin is in the box seat. Şimdi

At this time, the share price, which is currently 23 shares, could have moved "north of 30" through an added sweetener: the dividend could be restarted.

Christina McGuire, Elephant Asset Management: Yangtze Fiber Optic and Cable (6869: HK)

The most important structural growth story of our time is the growing importance of data and links, Elephant Asset ...

Elephant Proverb Christina McGuire said the importance of data and connectivity to the main structural growth story of our time has increased.

Nic Walker

The main structural growth story of our time is the growing importance of data and connection, starting from Mrs. McGuire. Cows not only from man to person or from man to machine, or from machine to machine, even to farmers. Yarat The information we create with all these links is huge, “he says. "We don't even look at the new technologies we've developed over the next five or ten years."

Data and connectivity has become increasingly political. 2025 in China is divided into 10 sectors to be self-sufficient; The majority of them depend on higher data and the growth of the link. This is enabled by the infrastructure and means that the network must be 10 times more dense than more base stations and optical fibers.

But a telco doesn't want to spend too much money on the 5G upgrade.

But the Chinese government can have a different view and direct the capex. Enter the Yangtze as a supplier to the sector: 2014 & # 39; s income has doubled and tripled. Fund manager, 4G and 5G capex between the absolute bottom point. Since the stock is earning more than 6 times, it's a great time to think about going on in the long run, and the only real risk is a delay due to 5G capex. "Here we look at a fantastic structural story."

Geoff Wilson said the estimated 2.3 billion players worldwide and some thousand-year games to reduce stress.

Geoff Wilson said the estimated 2.3 billion players worldwide and some thousand-year games to reduce stress.

Peter Braig

Geoff Wilson, Wilson Asset Management: Bandai Namco (7832: TYO)

Wilson Asset Management chairman, mobile gaming company Bandai Namco's low valuation, strong industry dynamics and strong intellectual property rights based on the next "less time" has a potential of more than 50 per cent increase, he said.

The highest growth rate of global games is 10 percent per year and is even greater in the mobile segment: 20 percent per year. Estimated 2.3 billion players worldwide, reducing the stress, improving mental health and feeling confident 50 percent of millennial games. He said it was his game.

The company, which was created in 2005 by the merger of a toy company and gaming company, said it was well-management, strong cash flow and well positioned. At the same time it is inexpensive, growing at a similar rate to the sector, while about half of the market is 13.4 times more than cash adjusted earnings.

Mr. Wilson said it was a

Mr. Wilson said that he had chosen a offshore company with a k heavy heart n, but this was due to his concern over the worker's offer to make franking loans that are irrevocable.


Wilson chose to do an offshore company with a red heavy heart fr, but his concerns were related to his offer to make franking loans, which were not possible to return. Wilson, who had identified Süleyman Lew in his audience, told Myher's shareholder that the entry price of WAM at least was lower than that of Mr. Lews.

Beeneet Kothari, Boat Capital Management: PagSeguro (PAGS: NYSE)

Payments companies are amazing businesses that are growing and profitable, Mr. Kothari, and PagSeguro have a precious jewel in Brazil. Stock markets are cheap because of the unwillingness of global investors to emerging markets. While the growth of the company slowed down during the 2016 recession in Brazil, it grew by 100 percent to 40 percent, and has continued to grow three digits since then.

PagSeguro serves small traders with about 12 million in Brazil. They account for one-third of Brazil's GDP. "You have a chance to be the dominant market leader in the big market," says the fund manager. "Only with earnings growth, you can get a share that can be doubled in a few years," but the real gains will be made if multiple earnings gain 10 times the current appraisal expands.

"Why does it explode? Because the company has one-tenth of what it can do in a few years." PagSeguro transfers $ 38 billion a year in payments with only 2 percent of the total market size. "The market can grow for a long time before it enters sizing problems and is very profitable."

Kothari thinks investors are concerned that Brazilian regulators will disrupt installment payments, but that such a loan is a "lifestyle" in Brazil. "Half of all transactions in Brazil were installment payments, allowing merchants to provide instant liquidity." Brazil is a country that does not have a lot of household debts, so it has access to credit by buying goods in installments.

Blake Henricks, Firetrail Investments: Nufarm

Why buy Nufarm? The consolidation of the industry and the Omega 3. Nufarm lost value due to the drought in Australia and the distribution of a common herbicide commonly used in products. The company had two stumbles, but Mr. Henricks believes that today's prices offer great value. The industry is now more consolidated than the Australian banking market. This means that Nufarm is able to get its organic market share because it distracts its competitors while making M & A, and Nufarm is a utilitarian of industrial consolidation.

Blake Henricks of Firetrail became the first fund manager of the Sohn Hearts & Minds event in Melbourne on Friday.

Blake Henricks of Firetrail became the first fund manager of the Sohn Hearts & Minds event in Melbourne on Friday.

Daniel Munoz

Nufarm has a technology worth $ 1 billion, which does not win anything today, but according to Firetrail. People rely on small fish as a source of Omega 3, growing about 6 percent per year. Henricks does not expect an increase in ocean-based Omega 3 supply due to excessive fishing. However, it can now be grown from plant-based canola and Nufarm can take 20% market share of this supply deficit.

Most regulatory approvals have emerged and the market is currently trading on EBITDA for less than seven times, as it overreacts to the drought and glyphosate concerns. Henricks said that one of the major strategies was to take it from a drought and sell it in the rain. Nufarm believes that it is well placed around all reasonable scenarios for glyphosate results. $ 10.44 valuation.

Emma Goodsell, Airlie Fund Management: Reece

In May, Ms. Goodsell says she is awakening to the ten most frightening words an Australian investor can read – to fund his own capital increase, a purchase of greater sea water than private capital. De With the Bunnings sausages eaten halfway down in the rain in England, de said Britain's home improvement chain, Homebase, de he said.

However, Reece Ltd says that the $ 1.9 billion wholesale sanitary ware chain is a logical logic to the purchase of MORSCO. One of the reasons for this is that Reece is managed by an owner – a subset of shareholders that yields twice as much revenue as a larger index.

The Wilson family, which still has a significant share in the $ 6 billion company, has managed to perform better than their main competitor, Tradelink. Over the past 20 years, Reece's sales have risen to 6 times, profits to 18 times, while Tradelink has been flat. Goodsell, "They invested in fantastic returns." Said. Increased margins and US $ 10.77 out of $ 10.77 out of $ 10 & # 39; he says he can add up to a.

Nick Griffin, Munro Partners: Amazon

Mr. Griffin believes that Amazon may be the second company to realize a US $ 1 trillion valuation, but will be the first to win US2 trillion US dollars.

Airlie & # 39; s Emma Goodsell won second place with Reece on Friday.

Airlie & # 39; s Emma Goodsell won second place with Reece on Friday.

"This is quite bullish market disclosure, but the fund is still the best stock idea, although it has e-commerce and the world's largest cloud computing stock for many years.

Griffin, the biggest problem for investors always said that Amazon's valuation. However, the company's valuation is relatively stable around 20 times before interest tax amortization and depreciation (EBITDA), which is a 40 percent premium for a standard consumer company, he said.

It also questions the opinion that the stock is over-valued for not making any money: Amazon points out that it has not undertook capital increase since its listing and can fully finance its growth.

Griffin says Amazon is at the start of two "growth tracks" and has a 10 percent share in the two fast-growing sectors: cloud computing and e-commerce. "The growth of the Amazon stems from two structural trends, and both are in their infancy," he said.

Amazon said it has a share of 109 data centers worldwide and a 50 percent share of the public cloud market. In addition to boosting its market share, Griffin said Amazon will increase its margins and will create margins at only 5 percent in the e-commerce section.

Griffin predicts that Amazon's EBITDA will increase more than threefold over the next seven years, estimated to be 17.5 times over, and that it will have an operating value of US2.3 billion dollars by 2025.

Scott Bessent, Key Square: macro views

Macro invests three powers: Bessent won the crowd by saying that it could be long in Melbourne for long periods of any existence in the world. Presentation, & # 39; divorce, disruptive & divergence & # 39; The theme was macrodi. When the former professor announced his candidacy for Donald Trump, he said he was confident of a Trump victory – "The hardest part of the macro investment separates what you want it to be and what is likely to happen". Divorce is a theme of 2019 and maybe next ten years, referring to China and US relations.

Nick Griffin from Munro Partners thinks that Amazon has hit a market cap of US2 trillion dollars.

Nick Griffin from Munro Partners thinks that Amazon has hit a market cap of US2 trillion dollars.

Jessica Hromas

He tells everyone to come to the office with a European idea, say, "Get out of hell." But the new government in Italy calls for a wake-up call. The bull case for Europe is based on breaking open financial spending as it is the only place that does not spend financial money. In the United States, we have "put out the doors".

The difference, the "orange swan", speaks of a rare creature that likes to hiss, with good instincts and many features of a black or white swan. President Trump, however, created a perception that the government was on the job side, leading to a decline in regulation. The White House is trying to include the Democrats in an infrastructure program.

"An alternative result is that the Democrats are a trust killer in the economy."

When trying to evaluate the Australian dollar, it starts with g where is the money according to the long-term real exchange rate and purchasing power? Avustral. "Aussie dollar is not cheap, it's not expensive now". It spends a lot of time on the plumbing, that is to say the financial sector and the economy – the GDP remained highly flexible. "This is the first time in my career that US rates are higher than Australian rates," said the 56-year-old. Said. Finally, "When you're sure, do twice as much."

Tim Carleton, Auscap Asset Management: JB Hi-Fi

"When it comes to these issues, JB is a retailer like Hi-Fi, and how do we feel comfortable buying a high-quality retailer?" The fund manager referred to house prices and Amazon. He is taking the other side of the longer JB Hi-Fi, the sizeable shorts against the stock.

Mr. Carleton says he is worried about Amazon's rise and falling prices, and the shortest stock retailer JB Hi-Fi is screaming. The retailer is well managed, high-cash-generating and most importantly, 11-fold forward.

The JB Hi-Fi was a short idea at Reg King's 2017 conference, because he thought Amazon would break the brick and mortar model. However, Carleton says the retailer is competing with Amazon on headphones, games and laptops, and will attract more eyeballs to the website.

Griffin, the biggest problem for investors always said that Amazon's valuation.

Griffin, the biggest problem for investors always said that Amazon's valuation.


He also believes that the power of the Australian economy is very low. The correction in housing prices was triggered by tightening the loan – a "reasonable long-term goal".

"We forget a number of economic positive values ​​- household riches are always high, and a 20% decline in house prices will only bring us back to 2016 levels.

Importantly, Australia's population growth is healthy and there is still a positive inflation – a positive forecast for retail sales in the medium term. ”We are in a technology super cycle and this is the company that will sell us the tools we need for the next twenty years.“

Kok Hoi Wong, APS Portfolio Management: Venustech (002439: CH)

China's dominant cyber security firm, Venustech, is the choice of Kok Hoi Wong and says it is better than a strong growth stock: it is also resistant to recession and very valuable. The Fund was first interested in the sector after the Edward Snowden incident and has visited Venustech 15 times since 2014 and has spoken to the company more than 50 times. Venustech is the largest cyber security company in China with a market share of 8 percent.

At a broad level, APS said that China invested very little in cyber security, and that the cyber security investment spending on IT was about 1 percent compared to 6 percent in the US.

The fund is affected by the talent in Venustech. Approximately 30 percent of approximately 4,000 employees with a doctorate or master's degree, including the founder. Venustech has a large customer base, serving 80 percent of government agencies, 60 percent of banks and 500 largest Chinese companies. In addition to gaining market share, another growing source of earnings is the SME sector, which determined that the adoption of cyber security is 80 percent in the United States and 35 percent in terms of winning contracts for cities.

Or This strong buying ü, paradoxically, the worsening of Chinese-US relations, increases the visibility of this company's earnings, “he says. Valuation is 23 times more compelling for next year. "While some people are talking about building walls, China built it 2000 years ago … today, China is building a new wall in cyberspace, a wall that you can't see and touch, but it probably makes a profit."

When it comes to financial spending, Scott Bessent says

When it comes to financial spending, Scott Bessent says "we blew the doors up" in the US.


APS, which mainly manages US2 billion US dollars for institutional investors, was founded in Singapore in 1995 and became one of the first foreign investors in China. At the Sohn conference in Hong Kong in May, stock buying was going to a short JD.Com, according to an over-priced share price and a CEO who made ve reckless and stupid Soh purchases.

Or It's almost impossible for JD to make any profit for the next few years yap but the stock still sells five times on the NAV. Why is it so amazing for me that so many institutional investors are holding stock? Neden

Steven Glass, Pengana: Snow Auction Services (SNOW: NYSE)

Snow is the auctioneer for commercial customers mainly in North America. The Adesa unit is an auctioneer of all vehicles with a 30 percent market share and the two largest players have a 70 percent share in this market. Another business, the IAA, has a market share of 40 per cent and rescue vehicle categories. Profits are mainly active in the two major markets and they are all great players. In this way, he will topple the IAA in 2019.

Finally, the AFC unit provides car financing: "This business is not as risky as you think," he says. Glass was profitable in 2008 and 2009 to give you an idea, so iş Don't let this take you away from Snow. Glass

Ihtiy I love the effects of the network, tesis he continued, and denetim the profit has net effects on the network. “The scale due to the need to operate numerous large facilities to provide vehicle repair services and inspections. "The key message has sustainable competitive advantages in Profit." The market yields only 18 times, and 6 percent free cash flow yield.

However, there are two structural bearish controversies: the vehicles become safer and there will be a decline in vehicle ownership due to vehicle sharing services. The problem with this argument is that the spindle drive is actually an important driver of the volumes of the profit.

More to come

JB Hi-Fi is Tim Carleton from Auscap's long idea.

JB Hi-Fi is Tim Carleton from Auscap's long idea.

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