Australian fund managers have been scouring the sharemarket for the next Berkshire Hathaway and former ASX darlings that are set to stage a comeback.
The latest round of stock pitches at Livewire’s 2025 conference in Sydney, showed stock pickers had found opportunities in the smaller end of the sharemarket, while others were sticking to their guns on the US technology giants.
L1 Capital co-chief investment officer Mark Landau, said the August reporting season had thrown up some good investment ideas, particularly when a company’s results had failed to beat the market expectations. He named ASX-listed mining services group Imdex, whose shares had tumbled 12 per cent on results day. Year to date, the stock is still up 33 per cent.
“I actually thought the outlook is even better than what I thought going in [to the results],” the Melbourne-based portfolio manager told delegates at the conference.
Speaking at the same event, value investor Simon Mawhinney from Allan Gray pitched medical glove maker Ansell, which he described as a “boring” company to invest in.
“It’s one of the very, very few companies, bar a recent equity raise … [where] the share count is lower than it was 15 years ago, so it has perpetually been buying back shares,” he said,
And while the market yawns at the glove maker, Mawhinney said its steady capital allocation had set it apart.
“Neil Salmon is the CEO, and he’s a very steady, methodical thinker and seemingly a very good capital allocator. And if you’ve got someone at the helm who’s stewarding your investments … I think nine-10ths of the job is done.”
Stability was also the name of the game for WAM Leaders deputy portfolio manager Anna Milne, who pitched Goodman Group, a property company once known for building warehouses that was now developing data centres.
The stock is trading “at the lowest premium for the market that it has in five years,” Milne noted, calling it a safe hold in volatile times. “Regardless of what happens, we know the future will run on data.”
Soul Patts was pitched by Ausbil’s David Lloyd as the market’s next Berkshire Hathaway. Lloyd said its merger with Brickworks, which ends decades of cross-ownership between the two companies, simplified the structure and would unlock index buying.
“This is turning Souls into a $14 billion investment house,” he said. It’s “starting to look a little bit like a Berkshire Hathaway or a Blackstone.” The result, he added, was a “unique can-invest-through-the-cycle” vehicle with liquidity and room for a higher valuation.
Turnaround stories have caught the attention of Jun Bei Liu at TenCap. She’s backing Domino’s Pizza, which has been punished by shareholders for its lack of progress in reversing the fast food retailer’s fortunes.
“The company has now identified what they need to do … close unmarketable stores, stop this rampage of store rollout,” she said. “If franchisees make more money, then they will roll out more stores, and it’s good for you.” With earnings poised to rebound from depressed margins, Liu said there was potential for profits to double.
In global equities, Regal’s Jessica Farr-Jones pitched European-used car selling platform Auto1.
“The most important thing for me is figuring out how big the moat is and how durable it is,” she said. Auto1 ticks that box: founder-led, already the number one automotive platform in Europe, with $600 million of cash and no debt.
She also likes local used dealer Carma, describing it as a local version of US used car seller Carvana and Auto1 that is “slated to IPO on the ASX very soon”. Regal is an investor in the currently private company.
Munro Partners, one of the country’s largest backers of the US tech giants, delivered an emphatic pitch for Nvidia, arguing that the chipmaker is only three years in of a decades-long AI boom.
“This decade is going to be the Nvidia decade,” Qiao Ma said.
With AI adoption just beginning, Ma said Nvidia’s hardware and software stack would form the foundation for companies yet to be born.
And despite its meteoric rise, she said the valuation was still reasonable: “The stock is at $US168. That is less than 17 times price to earnings, for one of the best growers.”
Plato’s David Allen, meanwhile, made the case for Palantir Technologies because of its role in overhauling Britain’s health data systems during COVID-19.
Palantir has been one of the hottest stocks on Wall Street of the year, with its shares more than doubling to trade at around $US156 apiece.
“Palantir came into this archaic, siloed system, and within a matter of weeks … they had plugged into these disparate data streams to produce actionable information and allocate all of these finite, precious resources in a very intelligent fashion, very likely saving tens of thousands of lives.”
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