Transcription of Finance News Network Interview with Antares Australian Equities Fund Portfolio Manager, Glenn HartLelde Smits: Hello I’m Lelde Smits for the Finance News Network and joining me from the Antares Australian Equities Fund, is Portfolio Manager, Glenn Hart. Can you outline the Fund’s investment strategy and your investment approach?
Glenn Hart: We’re bottom-up stock pickers, so we do fundamental research on companies. We value, specifically value, each individual company with a view to buying stocks that are big discounts to our valuation, and not owning stocks that come up expensive by us. So we tend to find that we behave in a selectively contrarian way. That most of the good opportunities we find tend to be unloved for certain reasons.
Lelde Smits: With the local market near six-year highs, does it make it more difficult for you to find stocks that meet your criteria?
Glenn Hart: It does in some ways. What we’re finding, a range of different types of stocks than we might normally find. So at the moment, our focus tends to be where we’re finding the most value on stocks that have been a bit unloved for certain reasons. And where there’s been a strongly performing part of the market which has been very momentum driven, it’s pushed valuations very high in that part of the market.
Lelde Smits: What are some of the Fund’s biggest positions?
Glenn Hart: What we try and do is fundamentally value companies and if the things that we really like to invest in, are when we can find genuine valuation anomalies. Now they can occur in a number of instances, one of the instances can be some of the parts. So as an example, one of our large positions is in an energy stock called Santos Limited
(ASX:STO).
So our energy analyst, our oil analyst, values each project. And when he values each project what they’re worth now, that when you add them together, it comes out to quite a massive premium to where the current share price is. So we believe that when we take a long term view of each project, the market is discounting some of the projects for short term reasons, because they’re not yet producing. So that’s the type of opportunity we look for.
Lelde Smits: Which sectors are you overweight or underweight and why?
Glenn Hart: We’re mainly overweight - our biggest overweight is to energy at the moment, which is a number of stock specific decisions. So there’re some certain projects in stocks that we own, which we think the market has not appropriately valued. So we think on a two to three year view, there’s really serious earnings growth in those stocks and valuation that the market’s not picking up. So that’s in the energy sector.
Also in the insurance sector, there’s a number of stocks there also which we think have hit an inflection point, for turning around. So they’ve just started to produce better numbers and there’s some really serious valuation upside there as well. So parts of the market that we’re not so keen about generally speaking, more so than sectors it’s kind of a thematic and that is high kind of P/E momentum driven; really glamour type stocks, we think are really very fully valued.
Lelde Smits: Glenn Hart, thank you for the update from the Antares Australian Equities Fund.
Glenn Hart: Thank you.
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