By James Thomson
After a tumultuous start to 2022 for investors, the best lesson to learn is that trying to time the market when volatility is high is a mug’s game.
With this in mind, we turned to some of the stockpickers who provide their services pro bono to Future Generation, the $1 billion ASX group that runs two listed investment companies and donates 1 per cent of its assets each year to charity.
We had a simple request: give us your top picks from a long-term perspective.
The responses are from three managers supporting Future Generation Australia (which focuses on ASX companies and charities that support children and youth at risk) and three from Future Generation Global (which invests in offshore companies and focuses on charities that support youth mental health).
They tap into some big themes for the market, such as ESG, data and digital.
“Maas Group has over 6000 residential property housing lots and significant commercial property interests held at cost on its balance sheet that, when developed, could potentially achieve a market value close to $1 billion on our estimates,” he says.
Oberg says this means that investors are paying only about $300 million for Maas’ construction materials and civil engineering business.
WAM believes the share price could more than double in the next three years if Wes and his team can pull off the property development strategy.
The global equities team at Nikko Asset Management is also looking to play the property and construction theme with its pick, New York-listed group Carlisle Companies.
The Arizona-based company is ploughing money into its high-margin construction materials division, which makes products that help improve the sustainability of buildings, which account for 30 per cent of the world’s carbon footprint.
A good example is its popular roof garden products, which can help slash stormwater runoff and improve the insulation of a building, lifting its energy efficiency.
With regulatory requirements and a flood of government support driving demand, Nikko believes Carlisle can add to its 48 per cent share price gain over the last 12 months.
David Moberley, lead portfolio manager at Paradice Investments, has been keen on IDP Education for some time, and isn’t losing the faith despite its 15 per cent drop this year.
He says the company, which specialises in English language testing and university student placement services, is battling a long tail of unsophisticated competitors.
As such, it can use a technology advantage to take its market share from high single digits to somewhere in the 20 per cent range inside the next five years in student placement, while there are consolidation opportunities in the English language testing market.