15 fund managers and the stocks they love

To a paraphrase a great man, investment is 'like a box of chocolates – you never know what you're going to get'.

The Wealth Manager team is so full of love today after a host of fund managers revealed the stocks setting their hearts racing this Valentine's Day – so much so it inspired us (well one of us – can you guess who?) to pen this short poem:

Roses are red
Violets are blue
Here are 15 fund heads
Who've got stock picks for you

Find out why we got so inspired as 15 emotional managers talk through their affairs, some of which have lasted more than 20 years!   

The Wealth Manager team is so full of love today after a host of fund managers revealed the stocks setting their hearts racing this Valentine's Day – so much so it inspired us (well one of us – can you guess who?) to pen this short poem:

Roses are red
Violets are blue
Here are 15 fund heads
Who've got stock picks for you

Find out why we got so inspired as 15 emotional managers talk through their affairs, some of which have lasted more than 20 years!   

Hotel Chocolat

Audrey Ryan

Investment manager, Kames Capital UK equities team

Chocolate is up there as one of the most popular Valentine’s gifts and Hotel Chocolat is rapidly becoming the go to affordable luxury option in the market.

Brand is central to Hotel Chocolat’s success and the company prides itself on originality and innovation. Ever-more tempting and delicious products are constantly being launched, like the Velvetiser – a machine that promises barista-grade hot chocolate (mmmmmm).

The track record of success since IPO in 2016 points to a high quality management team with the right strategy for continued (and sustainable) growth.

By selling through its own stores, online and through wholesale partners like Ocado, Amazon and QVC, it has a number of routes to market and with international expansion gathering pace too (new stores recently opened in New York and Tokyo), Hotel Chocolat is investing for growth, giving you more ways to grab that last minute box of chocolates (or Velvetiser) on your way home on the 14th.

Renishaw

Citywire AAA-rated Matt Tonge

Partner and fund manager, Liontrust Economic Advantage team

Our relationship with Renishaw first blossomed over 20 years ago. The company designs, develops, manufactures and sells high technology precision measuring and calibration equipment, which aims to enhance efficiency in medical diagnostics, machine calibration and neurosurgery, among other sectors.

Renishaw has excellent levels of intellectual property (IP) – a result of decades of accumulated research and development.

It has also built a global distribution network and this has helped cement the company’s strong customer relationships. IP and distribution strength are two of the three primary Economic Advantage intangible assets which we look for.

Amadeus IT

Samantha Gleave

Fund manager, Liontrust Cashflow Solution team

Amadeus IT is a stock we’ve held in the Liontrust European Growth fund for around five years.

We love this cash generative company that we consider to sit within the growth space, with its core business focusing on providing airlines and airports with systems to connect them with their passengers.

This includes products which help airlines respond to passenger issues following flight disruptions, such as rebooking journeys. The company’s solid balance sheet has helped it fund diversifying bolt-on acquisitions in recent years and it now services the wider tourism industry as well.

Hexcel Corp

Citywire + rated Thomas Sørensen & AA-rated Henning Padberg 

Portfolio managers, Nordea 1 – Global Climate and Environment fund

The majority of our strategy is allocated to resource efficiency – companies improving efficiency with products and services. An example of a company thriving in this space is Hexcel Corp, the leading carbon fibre producer in the world.

Carbon fibres offer significant material advantages, being significantly lighter and stronger than steel and aluminium. New generations of airplanes, such as Airbus’ A380 and Boeing’s 787 Dreamliner, are built with approximately 50% carbon fibre, resulting in 20% more fuel efficiency than older airplanes of equal size.

With fuel being one of the largest costs for airlines, Hexcel is providing significant savings for airline companies and value creation for shareholders – not to mention helping decarbonise the aviation industry. In addition, carbon fibres are making inroads into other industrial applications – such as wind turbines and high-end cars.

SITC

Carolyn Chan

Investment manager, Liontrust Asia team

The Liontrust Asia Income Fund found a real diamond in April 2014 – SITC.

Since then, the stock has more than doubled, outperforming both the MSCI Asia Pacific ex-Japan Index and the MSCI Asia ex Japan Index. SITC is an Asia-focused integrated logistics company which provides high frequency shipping and Chinese land logistics services.

It operates small sized fleet container vessels and is unique in its positioning, operating exclusively within Asia. We continue to believe that the company will be a key beneficiary of increasing regional trade as well as the gradual shift in manufacturing from China to lower-cost locations in Asia.

Inspired Energy

Citywire AAA-rated Ken Wotton

Manager, LF Gresham House UK Micro Cap and Multi Cap Income funds

The company is one of the UK’s leading independent energy consultants, advising mid-sized corporates and higher-end SMEs on how best to optimise utility expenditures.

The appeal of Inspired Energy is its revenue largely comes from energy providers. While it advises mid-sized corporations, Inspired Energy is paid in commission from contracts with large energy suppliers, with payments based on the energy usage companies incur. This guarantees multi-year revenues and high earnings visibility for the business.

We believe Inspired Energy understands its customers, and it has been one of our long-term holdings.

Diageo

Jeremy Lang

Partner and co-founder, Ardevora Asset Management

Diageo is a rare beast in the world of consumer staples today – a company able to grow sales organically without sacrificing margins. However, analysts are in a dilemma. They can see the attractions of a company like Diageo but are traumatised by the difficulties faced by peers in the sector.

The compromise is that Diageo is on a modest premium to the staples sector. We think this is churlish and underestimates Diageo’s ability to keep generating modest real growth and strong cash flow well into the future.

The company is also using excess cash flow to buy back shares. This is an attractive cocktail of factors, as long as investors have the patience to let the impact of long-lived, low growth work its compounding magic.

Elekta

Claire Shaw

Manager, OYSTER European Mid & Small Cap fund at SYZ Asset Management

Elekta invests in game-changing technology to improve the precision and accuracy of cancer radiation therapy through its product, Unity.

Unity’s high-quality MRI technology enables clinicians to observe real-time changes in the location and shape of a tumour – improving treatment of tumours with a tendency to move. However, market-leading technology is merely the ‘jewel in the crown’ of the investment case.

Our main thesis is based around the fact Elekta operates in a stable duopoly with Varian. There are high barriers to entry from a regulatory and technological point of view and a large installed base, which gives the company a long-term revenue stream.

EDF

Citywire AA-rated Jacob Mitchell

CIO of Antipodes Partners

Due to the German policy of subsidising renewables, an oversupply of peak power has had the unintended consequence of knocking cleaner burning natural gas out of the supply stack in favour of cheaper hard coal. Without the earnings flowing from ‘peak pricing’, both hard coal and gas generators in Germany have failed to recover all-in costs for a number of years.

As a consequence, 15% of hard coal and 23% of gas/oil plants have already declared decommissioning plans. Combined with the forced shutdown of nuclear and lignite plants, we estimate 30% of required German capacity is set to exit by 2023, leaving Germany – and surrounding countries importing from Germany – short of power.

While renewables will fill some of this gap, gas fired generation will play a much greater role, leading to a large pick-up in gas demand as well as a significant increase in power prices.

Greggs

Douglas Scott

Investment manager, Kames UK Equities

The way to a man’s heart is through his stomach” but this may not involve some Chile en nogado or Galantine.

There are more frugal and simple ways to achieve this. Last year Greggs offered a candle lit fine dining experience all for £15 per couple. Sadly due to the high demand the deal sold out within twenty minutes, leaving many an epicure disappointed.

This the year the problem in selective cities is what to order. Greggs are trialling home delivery, one can participate in the valentines experience through a Beef Chili bake (£1.50) and a Jammy Heart Biscuit (75p). If you still have room after that you can buy twelve donuts for a fiver. Why dine out when you can feast in (and avoid any washing up)!

Sampo Group

Olly Russ

Fund manager, Liontrust European Income team

The Liontrust European Income funds have long been enamoured with Sampo Group, which Chairman Dr Björn Wahlroos has brilliantly steered from being a small Finnish insurer to one of the pre-eminent financial powerhouses of the Nordics, with controlling interests in fellow Nordic insurer Topdanmark and the Scandinavian bank Nordea.

 If it sounds like we’re gushing, it’s because over the last 10 years, Sampo has returned over 300%, slightly more than half of which has been via dividends. It is forecast to generate a dividend yield of over 6% next year, more or less the same as it offered when I bought it over a decade ago.

Even now the company looks very cheap for such a high-quality business that gives lessons in best practice to UK insurers.

LVMH

Mark Peden

Lead manager, Kames Global Equity Income Fund

With over 70 luxury maisons to choose from, what company in the world can provide practically everything for the ultimately perfect Valentine’s experience? Try Bernard Arnault’s brand powerhouse LVMH and indulge yourself just a touch...

Aboard the Royal Val Lent yacht slip into your favourite Christian Dior gown and Emilio Pucci or Nicholas Kirkwood shoes, pick up your Louis Vuitton Neverfull bag and spray on a little L’Interdit par Givenchy. Be sure to cover any blemishes with Benefit Cosmetics and head down to the drawing room. Oh, and don’t forget the Chaumet tiara and that priceless Bulgari timepiece of course darling.

Once there sample an unrivalled choice of champagnes from Dom Perignon, Moet & Chandon, Krug, Ruinart and Veuve Clicquot amongst others (are there really any others?). After supper has been served and accompanied by a selection of the finest wines from Chateau d’Yquem, finish off with a wee dram of Ardbeg or Glenmorangie, or why not one of each? What more could anyone want? An even higher share price perhaps…?!

Carnival Cruise Line

Colm Harney

Global equities analyst, Sarasin & Partners

The large ‘baby boomer’ generation is approaching prime cruising age, and despite significant increases in longevity and health, average retirement ages remain relatively young.

Carnival is investing heavily to meet this demand, with a further 15 ships due to come into service between 2019 and 2022.

The steady improvement in fleet efficiency, alongside investments in technology that improves on-board spending and more sophisticated booking management systems, means Carnival’s profitability and returns should improve over the coming years.

Moreover, Carnival has led the cruise ship industry in tackling climate change, fitting scrubbers to all its ships to reduce sulphur emissions and introducing the first LNG-powered cruise ship last year.

Ryanair

Allan Clarke

Investment analyst, European Equities at Kames Capital

What better way to treat your Valentine than by taking them on a cheeky weekend away?

With romantic destinations like Paris, Rome, Venice and Vienna all a short flight away it has to be a sure way of getting in to the good books with your loved one, right?

Just think, as the pilot comes over the intercom and says “Please relax and enjoy your flight” you can stare into each other’s eyes and look forward to that lovely hotel you’ve booked, the fancy restaurant reservation for a top-notch meal and when to surprise with the secret sparkly gift you’ve hidden away in your luggage. 

Mind you, that sounds like it’s going to be an expensive trip, so isn’t it wonderful that “Europe’s favourite airline” just happens to also be Europe’s cheapest airline – good job, Ryanair.

But what’s that?

You’ve had to empty out your luggage (complete with hidden gift) in the middle of the terminal building to get it down to the required weight? And you’ve forgotten to pay for seats together on the flight so have ended up at opposite ends of the plane, somewhere between the stag and hen parties that have decided to have a singing competition with each other?

Ah well, at least with Ryanair you know there’s a 90% chance your flight won’t be late(!)

Kingspan

Mike Appleby

Fund manager, Liontrust Sustainable Investment Equities team

Kingspan first set our hearts a-flutter over a decade ago and, over that period, the share price has swelled from a few cents to almost 40 euros.

Kingspan is an Irish company with 85% of its sales now coming from energy efficiency products used in heating and cooling buildings.

It makes insulated panels, environmental management systems and renewable energy solutions for businesses across the UK, mainland Europe and the Americas.

We think its ability to facilitate reduced emissions while also saving money is a structural tailwind that is underestimated by the market.

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Related Fund Managers

Audrey Ryan
Audrey Ryan
154/166 in Equity - UK (All Companies) (Performance over 3 years) Average Total Return: 7.51%
Jacob Mitchell
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552/650 in Equity - Global (Performance over 1 year) Average Total Return: 1.41%
Henning Padberg
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129/717 in Equity - Global (Performance over 1 month) Average Total Return: 4.06%
Claire Shaw
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70/70 in Equity - European Small & Medium Companies (Performance over 3 years) Average Total Return: 8.86%
Matthew Tonge
Matthew Tonge
11/54 in Equity - UK Smaller Companies (Performance over 3 years) Average Total Return: 51.31%
Douglas Scott
Douglas Scott
48/91 in Equity - UK Equity Income (Performance over 3 years) Average Total Return: 18.57%
Ken Wotton
Ken Wotton
30/112 in Equity - UK Equity Income (Performance over 1 year) Average Total Return: 5.27%
Jeremy Lang
Jeremy Lang
64/91 in Equity - UK Equity Income (Performance over 3 years) Average Total Return: 15.0%
Thomas Sørensen
Thomas Sørensen
6/38 in Equity - Global Themes (Performance over 3 years) Average Total Return: 55.91%
Mark Peden
Mark Peden
26/87 in Equity - Global Equity Income (Performance over 3 years) Average Total Return: 37.99%
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