Value stocks have shown signs of life in the last three months, but it will take time for the market to be convinced that this is a turning point. When we met with David Poppenbeek from K2 Asset Management recently, we asked for his thoughts, and how investors could position if the nascent shift to value picks up pace.

David laid out a potential sequence of macroeconomic events that could support this shift, then nominated two ASX20 stocks that could benefit. David told us that “they are trading on average PEs of 13 times PE, their balance sheets are ok, they’re generating 18-20% return on capital, and their dividend yield is around 6%”. In a market complaining about stretched valuations, the metrics on these two well-known stocks look surprisingly compelling.

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In addition to identifying undervalued stocks, K2 has the ability to actively manage equity market exposure and currency exposure as well as having the ability to short sell. To find out more, hit the contact button below or visit their website for more information.