Buy Hold Sell: Is there any value left on the ASX? (2 big buys revealed)

With the ASX hovering near all-time highs, you’d be forgiven for thinking the value train has left the station. But is that really the case? Or are there still pockets of opportunity hiding in plain sight?

In this episode of Buy Hold Sell, we dig into whether there’s any genuine value left in the market, and where two leading investors are finding it.

Dougal Maple-Brown from Maple-Brown Abbott and Hamish FitzSimons from AllianceBernstein share their philosophies, the must-have traits of a value stock, and what sectors they’re eyeing right now. 

Plus, they name one stock to avoid - and one they’re buying.

Please note this episode was filmed on 2 July 2025.

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Edited transcript

The meaning of value

Chris Conway: Before we get to the big question, I just want to understand what a value lens means to each of you. Dougal, I’ll come to you first.

Dougal Maple-Brown: As some of your viewers may know, we were the first value shop – formed 41 years ago. Like most value fundies, we’re trying to buy stocks at a discount to their intrinsic value. In practice, that means being contrarian – selling straw hats in winter. Over time, stocks get loved and overpriced, or hated and underpriced. We fish in that second category, looking for good value among the hated names.

Chris Conway: Hamish, what about you?

Hamish FitzSimons: I agree with a lot of what Dougal said. But today, we’re talking about our Defensive Equities Fund – an Australian managed volatility strategy. Some value stocks are defensive, and some aren’t. We’re trying to beat the market when it goes down, so we focus on those value stocks that tend to be more cash generative with stronger balance sheets.

Prospects of a value comeback

Chris Conway: In Australia, despite the longer-term outperformance of value, growth has dominated over the last decade. Is value due for a comeback?

Hamish FitzSimons: Absolutely. But I’d argue that the last two years haven’t really been about value versus growth. Some growth managers have done well, but growth is a small part of the Australian market. What’s really driven the market has been low-growth, not-very-cheap stocks just getting less cheap. CBA is the poster child for that. So I don’t think the value-growth lens fully explains what’s happened recently.

Chris Conway: Dougal, anything to add?

Dougal Maple-Brown: Totally agree with Hamish. I’d take it one step further and say it’s really about interest rates. Since the GFC, rates globally have gone from the top left of your screen to the bottom right – effectively from modest levels to almost nothing. That’s been tough for value, because while all asset classes benefit from lower rates, growth stocks benefit more. They’re longer-duration assets, so lower discount rates inflate their value. In 2020, with rates at zero, we saw PEs of 30, 40, even 50 times.

Fundies' key metrics

Chris Conway: Dougal, what are two or three key metrics that every company must have to make it into your portfolio?

Dougal Maple-Brown: We don’t have hard veto points like some fundies. But two principles we’ve learned over time: 1) Never buy a business you don’t understand – especially how it makes money. That becomes critical when the tide goes out. 2) Don’t double up on risk. Operational leverage and financial leverage are fine on their own, but together they can be lethal when things go wrong.

Chris Conway: Hamish, what about you?

Hamish FitzSimons: Similar idea. We build our portfolio around stability, quality, and price. We want stocks that go down less when the market falls. That means strong cash flows, strong balance sheets, and disciplined management teams. We also focus on cash earnings – not accounting earnings. Not every stock has to tick every box, but the overall portfolio needs a strong balance of those attributes.

Value left on the ASX?

Chris Conway: Alright, here’s the big question. Is there any value left on the ASX – and if so, where?

Hamish FitzSimons: Yes. At a thematic level, healthcare looks very interesting. These aren’t PE-of-seven stocks, but they are high-quality global franchises with strong growth outlooks. Names like ResMed (ASX: RMD), CSL (ASX: CSL), and Sonic (ASX: SHL) all have their issues, but I think in a few years’ time we’ll look back and see these as good buying opportunities. Another theme is companies being squeezed by higher rates and inflation – developers, building materials, and even some labour-heavy healthcare businesses. If they can keep executing, they’ll come out the other side stronger.

Chris Conway: Dougal?

Dougal Maple-Brown: I look at the market in three buckets: banks, resources, and industrials. Banks and resources are about 25% of the market each. We – like many others – think most banks are expensive, with one notable exception. In industrials, we’re leaning defensively based on valuations. We like consumer staples, telcos, and – for the first time in a long while – healthcare. Resources are tougher, given geopolitical uncertainty. Your crystal ball needs to be sharp on Trump, China, and others. We're finding better value in energy, less so in bulk miners.

3 stocks that look like value traps

Chris Conway: Let’s get to the stock level. I’m not asking what you don’t like – but which stocks might be presenting as value traps?

Dougal Maple-Brown: As a value investor, I’ve fallen for value traps – it’s part of the game. But we work hard to avoid them. Here are two names we own – which we don’t think are traps – but we analyse closely:

Chris Conway: Hamish?

Hamish FitzSimons: I’ll use Regis Resources (ASX: RRL), a gold company, to highlight a broader theme.

They have short-life assets – unlike BHP (ASX: BHP) or Rio (ASX: RIO), which have mines that’ll outlast us all. You have to discount for that.

They also have a project that’s taken forever to get approved – approvals can stretch indefinitely. And approval processes aren’t equal across geographies. A project in WA is more likely to succeed than one in NSW.

You’ve got to dig deeper and not treat all projects as equal.

Best value stock on the ASX right now

Chris Conway: Let’s end with a bang. What’s your best value stock on the ASX right now?

Hamish FitzSimons: I’m going small cap – our 59th largest holding out of 65: IPH (ASX: IPH). They’re a patent attorney firm. If Microsoft files a patent in the US, they help protect it in Australia, Canada, Hong Kong, etc. They upset shareholders by raising equity to buy assets. But since then, they’ve pivoted. They’re now buying back shares, not spending. It’s cash generative, has a high dividend yield, and if they can put together a few solid results, it could go very well.

Chris Conway: Dougal?

Dougal Maple-Brown: I’ll go large cap – ANZ Bank (ASX: ANZ). The big banks today are very similar: Aussie/NZ deposit and mortgage machines. But valuations vary wildly. CBA trades at ~30x earnings and 4x book. ANZ trades at ~13x earnings and ~1x book. Same business model, huge valuation gap. ANZ has a refreshed management team and a major IT transformation underway. Risky? Sure. But on those numbers, we’re happy to have a big overweight.

Chris Conway: There you have it – there’s still plenty of value on the ASX. You just need to know where to look. If you enjoyed that episode, give it a like and follow our YouTube channel – we’re adding great content every week.