Just came across the AFR article "Hunting for value with a contrarian mindset". The article is about a young analyst that loves "hunting for the companies the rest of the market has forgotten and buying stocks when they're most out of favour."
Some interesting statements in the article:- He says being a value investor isn’t just about buying companies on low multiples, but rather, it’s about buying stocks at a time when they’re a little out of favour.
- Sometimes Williamson’s bets are so out of favour, he prefers to keep them quiet. “We own Woodside. LNG did grow during COVID and I think there’s a strong case it will continue to grow,” he says. He says many assets in the portfolio are simply forgotten about by the markets, and the incremental retail buyers who would normally fill the gaps, are instead buying cryptocurrencies.
- Although value has been out of favour for some time, Williamson believes a renaissance is on the cards and growth managers could begin to struggle.“When the cycle changes, and the growth darlings have already seen it, it can crater quite quickly and God forbid you start missing expectations,” he says.
My take:- VEN could definitely fit the currently "out of favour" description because of the industry
- LNG & gas volumes are expected to grow (gas is the optimal fossil fuel to use as a balancing energy for renewables. This is because, unlike coal, gas fired power stations can be turned on when renewables aren't generating, and turned off when they're not needed. Those that believe gas can be phased out straight away in exchange for renewable generation don't understand this IMO.
- Cryptocurrencies and growth stocks are by far the most popular to invest in at the moment, creating opportunities in the small cap value space for companies such as VEN
So here we are, a bunch of hopeful contrarian value investors?
DYOR. My opinion only.
https://www.copyright link/markets/equity-markets/hunting-for-value-with-a-contrarian-mindset-20210604-p57y1c?utm_content=MARKETS&list_name=5655EA70-F54A-4680-8E43-524D4E016C59&promote_channel=edmail&utm_campaign=before-the-bell&utm_medium=email&utm_source=newsletter&utm_term=2021-06-07&mbnr=MzAwMDA4MjA&instance=2021-06-07-05-58-AEST&jobid=29311607
(20min delay)