(Bloomberg) — Although China’s economy is in a transition period, the country still offers investment opportunities, Howard Marks of Oaktree Capital Management LP told attendees Friday at the annual Sohn Australia conference in Adelaide.
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“Chinese shares are well underperforming and underperforming, and generally our bias is towards buying things on the bargain bin,” Marks said, according to the Australian Financial Review. He also said he expects the post-election rally in U.S. stocks to continue.
Read: China’s stock trading frenzy is a harbinger of a new bullish run
Meanwhile, Ricky Sandler, Chief Investment Officer of Eminence Capital LP, chose Barcelona-based Cellnex Telecom SA as his stock recommendation, while Beeneet Kothari of Tekne Capital Management LLC Didi Global Inc.
Investors had eight minutes to pitch their top ideas to the audience in the South Australian capital. Previous speakers include Ray Dalio, Cathie Wood and Bill Ackman.
This is what people gave to Sohn Australia:
IFM Investors, Bannan
The shares of Corporate Travel Management Ltd. closed 1% higher in Sydney after IFM Investors fund manager Rikki Bannan pitched the stock at the conference.
The company “has failed to exceed expectations on three occasions in the last 18 months, damaging market confidence in its prospects”, although the travel services market has stabilised, the AFR said.
Bannan acquired Australian biotech company Telix Pharmaceuticals Ltd. recommended during the 2023 event. Shares have more than doubled this year.
Samir Mehta of JO Hambro Capital Management Ltd. presented Tencent Music Entertainment Group on the buybacks and profit growth. US-listed stocks are up 20% this year.
“Cash generation and share buybacks are not something you associate with Chinese companies, but there has been a big change in attitude among many of them,” he said, according to the AFR. The Chinese music streaming market has huge potential, Mehta added.
Scalar meter, Gautam
Scalar Gauge portfolio manager and founder Sumit Gautam praised US-listed accounting software company BlackLine Inc. as he is optimistic about the company’s growth prospects as a market leader in this space. BlackLine shares are down 3% this year.
Ellerston Capital, Kourtis
Chris Kourtis of Ellerston Capital Ltd. chose the Australian fund manager Perpetual Ltd. because it claims to have the largest position in its portfolio. Kourtis mentioned new management, a cheap valuation and KKR & Co.’s plan. to buy the company’s asset management and business trust units as reasons for his bullish stance on the stock. Shares rose 2.3% in Sydney trading.
Northern Cape Capital, Wright
Fleur Wright of Northcape Capital Pty said the worst is over for Estée Lauder Cos., whose shares have fallen more than 50% this year. New management, restructuring plans and increased demand from China due to recently announced stimulus measures will stand the company in good stead, she added.
Read: Estée Lauder’s cousins leave their day-to-day roles as the stock collapses
Terra Capital, Bond
For Jeremy Bond, chief investment officer and founder of Terra Capital Pty, US-listed silver miner Coeur Mining Inc. the stock to watch as he sees a bull market coming for the metal.
“By purchasing Coeur Mining over the next year, we not only gain exposure to a commodity that we believe will continue to rise, but we also gain exposure to a company that is massively deleveraging and really starting to perform,” he told the AFR. reported.
Antipodes Partners, Ross
Portfolio Manager Vihari Ross of Antipodes Partners Ltd. recommended the French aircraft manufacturer Airbus SE.
“They operate in a duopoly and are leaders in short-haul travel,” she said, according to the AFR. Airbus’s now rival Boeing Co.’s planes are also likely to be in higher demand. is reeling from multiple crises, Ross added.
Read: Boeing is delivering the fewest jets in four years due to the 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 purchases an aircraft from Boeing or Airbus, they simultaneously enter into an uncancellable 40-year subscription with TransDigm,” the AFR said. He expects the $71.5 billion company to return about a third of its market value over the next three years.
Cellnex is a critical infrastructure company that supports a growth sector, Eminence’s Sandler said of his stock pick. It could ultimately trade at a 20% premium to its U.S. peers, he added.
Loftus peak, Pollak
Alex Pollak, chief investment officer at Loftus Peak Pty, gave US drugmaker Eli Lilly & Co. a tip. Pollak is bullish on the long-term prospects of the company’s weight-loss drugs and called the stock cheap at current levels.
“Lilly is priced as if it were a diabetes drug, but the real market is ten times bigger,” he said, according to the AFR.
Read: Lilly downgrades prospects after selling anti-obesity drugs after first miss
Tekne capital, Kothari
Tekne Capital’s Kothari chose Didi, saying the Chinese ride-sharing app has industry-leading earnings growth and room for shareholder returns. He also said he expects the company to eventually re-list in Hong Kong.
“The IPO window is now open as mega-listings are just starting 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
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(Updates with stock picks from Advent International, Eminence Capital)
