On any measure, volatility has been at, or close to, record lows. But as Adrian Warner, CIO of Avenir Capital points out, volatility of individual stocks within the index can still be more than enough to present opportunities. Here he describes a 'diamond in the rough' which is now transforming rapidly.
“We see these kinds of opportunities repeat themselves again and again. Our job is to find them and take advantage of them.”
Adrian tells the story of a stock in an unpopular sector, with a bad short-term history, and half the business in bankruptcy. However, with the ‘dead wood’ now cut out, the remaining business has revenue growth of 10%, earnings growth at 20%, and return on capital in the mid-30’s.
For further insights from Avenir Capital, please visit their website