Andrew Mitchell finds growth and protection in shifting cycles

When markets brush against record highs at the same time that central banks move into easing mode, investors are left with a familiar tension: is this the start of a new leg higher, or the prelude to something more fragile? 

For Andrew Mitchell, Senior Portfolio Manager and co-founder of Ophir Asset Management, with over 20 years of investing experience, the key is staying anchored in fundamentals while remaining agile enough to capture new opportunities.

In this Q&A, Mitchell shares how he’s navigating the current landscape—where robust cash flows, disciplined balance sheets, and overlooked growth stories can still stand out. He also weighs in on how investors might think about positioning when the cycle could just as easily favour cyclicals as it does growth.

His insights are rooted in curiosity—a trait he says has kept him engaged through every cycle. For investors navigating today’s cross-currents, Mitchell’s perspective offers a reminder: real opportunities often hide in plain sight, waiting for those willing to look deeper.

What’s your most recent investment and why?

I've recently added to Macmahon Holdings (ASX: MAH) in our Australian funds. The company delivered a result that was ahead of expectations, with EBITDA up 10% year-on-year to $387 million and underlying NPATA growing 11% to $102 million.

What really impressed me was the quality of those numbers. EBITDA conversion came in at 105%, net debt was reduced to $162 million, and the dividend payout range was lifted to 30-45% of NPAT.

Looking ahead, FY26 guidance points to revenue of $2.6-2.8 billion and EBITA of $180-195 million, which I estimate could translate to ~20% NPAT growth and free cash flow of $85-110 million. 

Despite the recent rally, the stock still trades on just 8.1x FY26 PE and 5.6x EV/EBITDA. To me, that looks undemanding given its growth outlook, improving returns on capital, and double-digit free cash flow yield. 

Which investment did you add to your watchlist this week?

I've recently added Clarity Pharmaceuticals (ASX: CU6) to my watchlist. It's a clinical-stage radiopharmaceutical company developing next-generation theranostic (therapy and imaging) products through its SAR Technology Platform, with the aim of improving cancer treatment and diagnosis.

The company raised more than $200 million to fully fund its Phase 3 trials, but interestingly, the stock is now trading well below the raise price as the market waits for the outcome of its Co-PSMA trial. 

This study is testing Clarity's copper isotope against the standard of care gallium-based diagnostic. It's an important comparison, given gallium diagnostics are an area where Telix (ASX: TLX) is a major player. 

Of course, Clarity still has to prove clinical utility, but a strong readout could change sentiment quickly. It has the potential to carve out a niche in the US market, and given some of the recent setbacks Telix has faced with the FDA in kidney and brain cancer diagnostics, the read-through could be significant.

What is the most recent investment you have trimmed or sold, and what drove this decision?

We've been trimming our position in the family safety app Life360 (ASX: 360) throughout the year. It remains one of our largest holdings, but with the share price running hard, we've had to manage position size. That said, we still see plenty of upside ahead. 

The key drivers for us are very much intact:

• Monthly active user growth continues to be strong, and the adoption curve in their most mature US states shows just how much runway there is in other regions and countries. 
  
  
• At the same time, retention is improving, and we see scope for higher conversion of free users to paid subscribers as the company expands into new verticals such as aged care and pets.
  
  
• On top of that, advertising revenue is starting to build meaningful momentum. Over the medium term, we think there's substantial upside as Life360 explores more ways to monetise its rich customer data. 

What’s your favourite chart or data point from this week?

One chart that really caught my attention looks at what happens when the Fed cuts rates while equity markets are sitting within 1% of their all-time highs.

Since 1980, that scenario has played out 14 times. 

On average, the market has gone on to rise 15.5% over the following 12 months.

The probabilities are even more striking when you break them down:

• 1 month later → higher 64% of the time
• 3 months later → higher 86%
• 1 year later → higher 93%
• 3 years later → higher 100%

It’s a reminder that rate cuts, even when valuations already appear stretched, don’t necessarily spell trouble. In fact, history suggests they can often act as a powerful tailwind for equities.

What was your weekly high - a standout market moment or highlight?

The standout this week was Genus Plus (ASX: GNP). The company continues to benefit from the electrification and energy transition theme, stacking up contract wins across transmission, storage, and network resilience. 

They're now deeply embedded in some of the major East Coast grid upgrades, including HumeLink East. On top of that, they've secured multi-year battery energy storage system packages and are delivering substations, HV cabling, and commissioning works that link new renewable generation into the grid. 

With a record ~$2.0 billion order book and a ~$2.4 billion tender pipeline, plus a growing base of recurring revenues, the business has excellent multi-year visibility and momentum. 

What was your weekly low – a market disappointment or challenge?

The challenge this week was anticipating how the market would respond to the Fed resuming its rate-cutting cycle and Chair Jerome Powell's commentary around it. Positioning ahead of these types of events is always important, but what we're particularly focused on is the potential for a regime shift - where market leadership changes hands. 

In the end, there wasn't enough deviation from expectations to spark a big shift (at the time of writing). The market is still trying to work out whether forecasted rate cuts will drive stronger economic growth - which would favour cyclicals - or whether a softer jobs market points to a weaker growth environment, where growth stocks would likely outperform.

The good news is that we feel well-positioned for either scenario. If growth accelerates, small caps broadly should benefit. If the backdrop weakens, the areas we're overweight - particularly small-cap growth - tend to hold up well. 

What first drew you to markets or this sector?

I used to be an economist in a former life. While I was working at Treasury in Canberra, I realised looking at companies with people running them was far more interesting than looking at economies and economic data... So it was an obvious transition I needed to make. 

What continues to motivate and inspire you as an investor?

Curiosity. I am by nature a very curious person. I love learning and there is always new stuff to learn. I also used to play a lot of sports and love working in a team towards a common goal.

How do you unwind when you’re not thinking about the market?

I am always thinking about the market, but when not at work, I make sure to maximise the time I spend with my family and my two young girls.

Ophir Asset Management

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