Resources stocks facing earnings upgrades

Mark Newman

K2 Asset Management

Valuation is a key factor for stock selection within our Australian portfolios. Given this value bias, our funds were not significantly exposed to the growth stocks that suffered from a momentum reversal seen in February. The fund recently took the opportunity to increase exposure to selected resource companies, given these companies are now facing the prospect of earnings upgrades from the analyst community. Although the outlook for key commodities remains difficult, we felt the market was excessively discounting this. The fund also established a holding in Fairfax Media, which we believe is well positioned to deliver strong shareholder returns in the current environment. Led by an experienced and capable management team we see their digital business as the ultimate driver of value as it continues to deliver strong growth while the strength of their balance sheet allows for further capital management opportunities. Downside risks still remain within their traditional print media assets; however these are well understood by the market, which is ascribing very little value to them.


Mark Newman
Mark Newman
Joint Chief Investment Officer
K2 Asset Management

Mark is a Co-Founder and Executive Director of K2 Asset Management. He is also the Joint-CIO for the K2 investment funds and focuses on the portfolio management of the Asian equity strategy.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.

Comments

Sign In or Join Free to comment