5 quality ASX companies this fundie is buying below their highs

The long-awaited recovery in small and mid-caps is finally here, but Ben Griffiths cautions against mistaking a bull market for a free-for-all.

As share prices run hot, he urges investors to stay true to their process and remain disciplined about what they’re buying. After all, as seasoned small-cap investors know, names in this space can fall just as quickly as they rise if the earnings aren’t there to back them up.

“When you run a process-driven investment style, which we do, you don’t just indulge in momentum trading, you need to be better than that,” he says.

That discipline has kept Griffiths focused on businesses that can withstand market noise, and right now he sees opportunity where others see risk.

“Our portfolios have been and tend to always be overweight quality names, especially quality industrials. And as you’ve seen in the last couple of months, quality as a factor has come under heavy selling pressure,” notes Griffiths.

But for those with a bit of nerve, it’s created precisely the kind of setup long-term investors wait for.

In this wire, Griffiths shares five ASX stocks he’s been picking up below their recent or all-time highs; names that have endured short-term selling but remain backed by strong fundamentals and proven management.

Griffiths' quality small and mid-cap names

Griffiths says each of the companies his team is buying share the same core ingredients: exceptional management, proven business models that perform through cycles, and a track record of smart capital allocation.

At times, though, the market simply loses sight of quality.

“Sometimes Mr Market, or the investing public, disengages momentarily from these good stories and sells them off. That’s when the attractive setups emerge - and we’ve seen a few of those recently across the industrial landscape," he says.

1. Pinnacle Investment Management (ASX: PNI)

• YTD total return: -10.9%
• Market cap: $4.3 billion
• Dividend yield: 3.4% (88% franked)
• Forward P/E ratio: 27.5x

Pinnacle is a multi-affiliate investment management firm that provides capital, distribution, and support services to a range of boutique fund managers spanning equities, fixed income, and alternatives. The business benefits from scale, diversification, and rising fees as assets under management grow.

Griffiths says Pinnacle’s short-term share price weakness doesn’t change its long-term appeal, describing it as a "tremendously run business" and one of the most resilient compounders in the Australian financials sector.

“It’s come under pressure, no doubt about it, but it has extraordinary management who have managed to allocate capital very effectively," he says.

2. Breville Group (ASX: BRG)

• YTD total return: -15.0%
• Market cap: $4.3 billion
• Dividend yield: 1.2% (100% franked)
• Forward P/E ratio: 31.8x

Breville designs, manufactures, and distributes premium kitchen appliances across more than 70 countries. The brand’s global reach and consistent reinvestment in innovation have made it one of Australia’s most successful consumer exports.

Griffiths highlights Breville’s seasoned leadership and capital discipline, noting it’s “a business that’s survived cycles and delivered actual trading results, not pro-forma numbers.”

3. ARB Corporation (ASX: ARB)

• YTD total return: -8.2%
• Market cap: $3.0 billion
• Dividend yield: 2.0% (100% franked)
• Forward P/E ratio: 29.7x

ARB manufactures and distributes 4WD accessories and off-road equipment, with a significant export footprint across the US, Middle East, and Asia. The company is known for innovation, steady profitability, and long-term shareholder alignment.

“ARB Corporation is another group that’s grown its sales consistently over time thanks to diversification in international markets," he says.

4. A2 Milk Company (ASX: A2M)

YTD total return: +67.2%
Market cap: $7.0 billion
Dividend yield: 2.0% (100% franked)
Forward P/E ratio: 36.0x

A2 Milk produces and markets dairy products containing only the A2 beta-casein protein. The company generates most of its revenue from Australia, New Zealand, and China, where it is a premium-brand leader in infant formula and liquid milk.

“A2 Milk is a quality industrial name that’s now back in our portfolios,” says Griffiths.

While the company has enjoyed a strong run this year, its share price remains well below historical highs of nearly $20.

Importantly, the fundamentals are improving: A2 Milk lifted its guidance earlier this year on the back of stronger demand in its key Chinese infant formula market, as the world’s second-most populated country moves to reverse its declining birth rate.

5. Ampol Ltd (ASX: ALD)

YTD total return: +10.5%
Market cap: $7.3 billion
Dividend yield: 2.6% (100% franked)
Forward P/E ratio: 20.1x

Ampol operates Australia’s largest network of fuel refining, marketing, and convenience store businesses. It has been investing in low-carbon transport infrastructure and alternative-energy initiatives to position itself for the transition ahead.

“Ampol, which is of course a refiner and a fuel marketer, is one such story that stands out to us as being very interesting at current levels,” Griffiths says.

He likens his current stance to “buying straw hats in winter” - building positions in sectors that the market isn't currently interested in.

Momentum, patience, and "managing the urge"

Griffiths says one of the hardest parts of professional investing is resisting the temptation to freeze when prices fall.

“Part of managing the urge is recognising that initial inclination to stand well clear of a lot of these industrial names when they come under pressure - or in the case of energy names, when it feels like they’re never going to rally," he says.

It can be nerve-wracking for investors - particularly in small caps - to watch share prices fall even as the broader index rises. But Griffiths reminds investors to return to their process and focus on the underlying thesis.

“If you’re buying that and investing in that, then share-price weakness - if anything - ultimately just sets up entry points,” he says.

“We pride ourselves on investing for the long term. We back management teams, pay not too full a price for a forecast earnings stream, and attach high conviction to that stream.”

Griffiths says the opportunity for small and mid caps versus large companies looks particularly attractive right now.

Despite delivering far stronger earnings growth - around 28% forecast EPS growth for FY26, compared with roughly 5% for the ASX 100 - small caps still trade at a 7% discount to their large-cap peers.

He also encourages investors not to panic-sell despite the market sitting at record highs, noting that key indicators don’t point to a bubble.

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