The 10-year anniversary of the Sohn Hearts & Minds conference recently convened in Queenstown, New Zealand, drawing fund managers to the picturesque foothills of The Remarkables. This year’s gathering unfolded against a backdrop of significant market upheaval; a violent Wall Street sell-off, fuelled by fears of stringent AI regulation, saw trillions wiped from global sharemarkets. Despite this volatility, prominent fund managers presented bullish cases, advising attendees to buy into specific stocks they believe are central to evolving market trends.
Vihari Ross of Antipodes Partners advocated for entertainment giant Disney, arguing it is priced for structural decline despite a promising future in streaming and cruises. Disney is a global entertainment conglomerate known for its theme parks, media networks, and film studios. It is currently transitioning its business model towards direct-to-consumer streaming and expanding its cruise line operations. Ross highlighted its current valuation at 14.5 times earnings, consistent with a decade ago, while delivering 10 per cent earnings growth, projecting up to a 20 per cent annual return opportunity.
Andrew Curtayne of Milford Asset Management identified Dutch chip manufacturing equipment maker ASML as a crucial player in the AI supply chain. ASML, a lithography equipment supplier critical for producing high-end chips with a 90 per cent market share, experienced a 10 per cent dip during the technology sell-off, which Curtayne viewed as a prime buying opportunity. Ravi Chopra from Azora Capital countered market fears about AI eroding profits for LPL. LPL is a financial services company that supports 32,000 advisers and manages $2.5 trillion in assets. Chopra asserted that LPL’s profits from client idle cash are robust, as advisers have already optimised client cash, mitigating the AI threat. These varied pitches underscore a selective approach by fund managers, identifying specific value opportunities amidst broader market uncertainty.
