(Bloomberg) — Though China’s economy is in a period of transition, the country still offers investment opportunities, Oaktree Capital Management LP’s Howard Marks told attendees at the annual Sohn Australia conference in Adelaide on Friday.
Most Read from Bloomberg
“Chinese equities are way down and underperforming, and in general, our bias is toward buying things that are on the bargain heap,” Marks said, according to the Australian Financial Review. He also said he expects the post-election rally in US stocks to continue.
Read: China’s Stock-Trading Craze Foreshadows Another Bullish Run
Meanwhile, Eminence Capital LP Chief Investment Officer Ricky Sandler picked Barcelona-based Cellnex Telecom SA as his stock recommendation, while Tekne Capital Management LLC’s Beeneet Kothari chose Didi Global Inc.
Investors had eight minutes to pitch their top ideas to the audience gathered in the South Australian capital. Previous speakers include Ray Dalio, Cathie Wood and Bill Ackman.
Here’s what people tipped at Sohn Australia:
IFM Investors, Bannan
Corporate Travel Management Ltd.’s shares closed 1% higher in Sydney after IFM Investors fund manager Rikki Bannan pitched the stock at the conference.
The firm “has in the last 18 months missed expectations on three occasions, shaking the market’s confidence in its outlook,” although the travel services market has stabilized, she said, the AFR reported.
Bannan recommended Australian biotech firm Telix Pharmaceuticals Ltd. at the 2023 event. Its shares have more than doubled this year.
JO Hambro Capital Management, Mehta
JO Hambro Capital Management Ltd.’s Samir Mehta pitched Tencent Music Entertainment Group on its buybacks and earnings growth. Its US-listed stock is up 20% year-to-date.
“Generating cash and buying back stock is not something that you associate with Chinese companies, but there’s been a big change in attitude in many of them,” he said, according to the AFR. China’s music streaming market has huge potential, Mehta added.
Scalar Gauge, Gautam
Scalar Gauge portfolio manager and founder Sumit Gautam touted US-listed accounting software firm BlackLine Inc., as he’s upbeat on the company’s growth outlook as a market leader in the space. BlackLine shares are down 3% this year.
Ellerston Capital, Kourtis
Ellerston Capital Ltd.’s Chris Kourtis picked Australian fund manager Perpetual Ltd., saying it holds the largest position in his portfolio. Kourtis cited new management, a cheap valuation and KKR & Co.’s plan to buy the company’s wealth management and corporate trust units as reasons for his bullishness on the stock. The shares gained 2.3% in Sydney trading.
Northcape Capital, Wright
Northcape Capital Pty’s Fleur Wright said the worst is over for Estée Lauder Cos., whose shares are down more than 50% this year. New management, restructuring plans and increased demand from China on the back of recently announced stimulus will serve the firm well, she added.
Read: Estée Lauder Cousins Leave Daily Roles as Shares Tumble
Terra Capital, Bond
For Terra Capital Pty’s chief investment officer and founder Jeremy Bond, US-listed silver miner Coeur Mining Inc. is the stock to watch, as he sees a bull market ahead for the metal.
“Buying Coeur Mining over the next year will not only get our exposure to a commodity we think will continue to go up, but you’re getting exposure to a company that is massively deleveraging and starting to really perform,” he said, the AFR reported.
Antipodes Partners, Ross
Antipodes Partners Ltd. portfolio manager Vihari Ross recommended French plane-maker Airbus SE.
“They operate in a duopoly, and they are a leader in that short-haul travel,” she said, according to the AFR. Airbus’s planes are also likely to be more in demand with rival Boeing Co. reeling from multiple crises, Ross added.
Read: Boeing Delivers Fewest Jets in Four Years Due to Strike’s Toll
Advent Global Opportunities, Katz
Advent Global Opportunities Mgmt LLC partner Jordan Katz selected aerospace manufacturer TransDigm Group Inc., citing the company’s lock-in contracts as an asset for the stock.
“When an airline buys a plane from Boeing or Airbus, they are simultaneously entering into an uncancelable 40-year subscription with TransDigm,” he said, the AFR reported. He expects the $71.5 billion company to return about a third of its market value over the next three years.
Eminence Capital, Sandler
Cellnex is a critical infrastructure firm supporting a growth industry, Eminence’s Sandler said of his stock pick. It could eventually trade at a 20% premium to its US peers, he added.
Loftus Peak, Pollak
Alex Pollak, chief investment officer at Loftus Peak Pty, tipped US drugmaker Eli Lilly & Co. Pollak is positive on the long-term prospects of the firm’s weight loss drugs and called the stock inexpensive at current levels.
“Lilly is being priced as if it was a diabetes cure, but its actual market is 10 times that size,” he said, according to the AFR.
Read: Lilly Cuts Outlook After Obesity Drug Sales Post First Miss
Tekne Capital, Kothari
Tekne Capital’s Kothari chose Didi, saying the Chinese ridesharing app has industry-leading profit growth and scope for shareholder returns. He also said he expects the company to eventually relist in Hong Kong.
“The IPO window is now open as mega listings are just beginning to make a comeback in Hong Kong,” he said, the AFR reported.
Read: Bankers See Asia Deal Drought Easing as Hong Kong IPOs Pick Up
Subscribe to The Bloomberg Australia Podcast on Apple, Spotify, on YouTube, or wherever you listen.
(Updates with stock picks from Advent International, Eminence Capital)
