3 common causes of stock mispricings

Most investors would be satisfied with a 6 out of 10 hit rate on their stock picks. Simon Shields and Shane Fitzgerald from Monash investors say they have been consistently hitting 8 out of 10 and share a few key ingredients to their success. A core focus of their process is looking at ways that the market misprices stocks, and they have an extensive list. The pair highlight 1) Overlooked Signals - or company information that the market fails to recognise; 2) Underestimating New Growth Opportunities - where the market is cautious of extrapolating growth options; and 3) Analyst Forecasting Error - essentially analysts not wanting to stick their neck out and drift too far from the pack. In this interview, the duo use examples of Ardent Leisure, Greencross and Myer to illustrate real-world examples of how these behavioural biases can create significant mispricings and in their eyes - opportunity.


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In 2012, Monash Investors was established by one of Australia’s most experienced fund managers in Simon Shields, the previous head of equities at both UBS and CFS, and Shane Fitzgerald a senior equity analyst from UBS and JPMorgan. The firm was...

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