Value investor Michelle Head Kim believes now is an ideal time to buy beaten-down stocks that investors would want to hold for the long term.
For instance, her firm has added Canadian banks to its Canadian Dividend Growth Fund, which has returned 5 per cent year-to-date. The fund, which is also light on energy at about 5 per cent of its weighting, has returned 3.3 per cent over the past 12 months and had an annualized three-year return of 13.8 per cent.
The Globe spoke with Ms. Head Kim recently about what she’s been buying and selling and the hot tech stock she was finally able to snap up last year:We describe our style as ‘fundamental value.’ It means that we look to own financially strong companies with an intrinsic value greater than the share price. In other words, they’re out of favour for some reason or perhaps not noticed by the market. We stay away from companies with excessive debt.