Already a subscriber?When sleep apnoea device manufacturer ResMed’s share price slumped almost 40 per cent from peak to trough last year on fears that weight loss wonder drug Ozempic would shrink the market for people seeking treatment for sleep disorders, Investors Mutual’s Daniel Moore was a buyer.
“Our research gave us the opinion that the Ozempic drugs would have limited impact on ResMed’s business,” the fund manager said. “It’s an industry leader.” If a business is higher quality, it should demand a higher valuation – but that doesn’t preclude value investors from owning it., but Moore says despite the stock trading at a multiple similar to the notoriously expensive Commonwealth Bank, CSL has been able to grow its earnings by around 15 per cent annually.“Even when you look at some of the tech companies, their earnings growth is not much higher than CSL, but they trade on multiples considerably higher,” he says.
“A great lesson we learned from Anton was writing letters to boards is a very effective way of sharpening directors’ focus on what shareholders want,” Moore says. “Letters to boards get minted in board meetings, and if they ignore those letters, there’s a potential liability on directors, so they really pay attention.”
Telstra, he says, has the most scale and the superior network. “They can charge higher prices. They’ve got a commanding position.”Investors Mutual’s Australian Shares Fund sealed a total return of 12.4 per cent in the year to September 30. That’s below the ASX 300 Accumulation Index’s return of 21.7 per cent. Even so, the fund has outperformed since its inception in June 1998, returning 9.7 per cent annually compared to the benchmark’s 8.9 per cent.