Buy Hold Sell: Quality stocks on sale
Holding high-growth names has been a painful exercise in recent months. Valuations in a number of quality companies have come under intense pressure due to a range of factors including: 1) increased competition, 2) structural shifts in industries, and 3) a simple case of sectors de-rating as investor sentiment swings. The collective valuation of REA Group, Carsales and Brambles, all quality businesses, has fallen $6.7 billion or 21.1% over the past six months and serves as a simple illustration of these shifts. Yet each company occupies market-leading positions in its respective industry locally, and in some cases globally. So, does this swift change in sentiment present a compelling opportunity for investors? Matthew Kidman puts this question to Alex Leyland from Leyland Private Asset Management and Hugh Dive from Atlas Funds Management. They also each share a quality company they think looks attractive right now.
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