A flurry of pre-earnings season confessions and boardroom shake-ups have sent shares in some well-known ASX names spiralling last month, and major fund managers are using the sell-off to snap up the companies on the cheap.
“Company updates have typically highlighted that investors were too early in positioning for a turnaround in cyclical activity,” Goldman Sachs equity analyst Matthew Ross said. Allan Gray’s investment chief, Simon Mawhinney, meanwhile, told investors at an investment dinner late last month that his fund had been topping up its position in packaging giant Orora. Mr Mawhinney first bought the stock last year after a capital raise and has been using the subsequent weakness to build up its stake recently.
“Orora has done itself a huge disservice with some of the recent corporate transactions it’s entered into, but its share price is important and assessing what you get for that share price is paramount.”And he appears to feel the same way about Telstra, which the fund first bought in the first quarter of the year. Shares in Telstra are down more than 20 per cent in the past 12 months.
SG Hiscock’s Hamish Tadgell, meanwhile, said he was confident that there was “plenty more upside” in recent laggard and engineering giant Worley. “In a lower-growth environment, and where increased spending on transitioning to lower-emissions energy technologies seems an undeniable trend in an uncertain world, we believe Worley has a strong earnings outlook.”