Mark Sedawie is portfolio manager at emerging companies’ strategy at DNR Capital. The Brisbane-based firm oversees $8 billion.IPH is an intellectual property group providing IP and trademark services to large multinationals that dates back to 1887. They are the clear market leaders across the Asia pacific, and recentlywhere we see significant growth opportunities. We hold the management team in high regard, as they consistently execute their strategy and exhibit disciplined capital allocation.
The market significantly underestimates the long-term growth potential of ARB. It is a market leader in the four-wheel drive accessories sector in Australia, with a long runway for growth as it continues to launch new products and expands internationally. The company continues to secure partnerships with major car manufacturers like Toyota and Ford, highlighting its engineering and manufacturing expertise.
it could be a potential target for an acquirer looking to consolidate the industry. The company has a well-established position and trades on a depressed valuation.We have seen an extremely volatile reporting season with outsized share price moves given the fairly uncertain outlook for the economy. It has been interesting to see the resilience of many of the high-quality consumer exposed companies which were heavily sold down earlier in the year on recession concerns.
Mining is a sector we have been more cautious on with the reporting season highlighting some of our key concerns. This includes the challenges associated with delivering a significant pipeline of new projects at a time of labour shortages, capital cost inflation and falling revenue due to weaker commodity prices.
Your fund is overweight on Breville. Why are you still bullish given the troubles the retail sector faces in this environment?The short-term concerns around the health of the consumer and economy have thrown up opportunities to buy high-quality businesses with. Despite uncertainties in the near-term environment, the 2023 financial year results underscored the company’s ability to sustain margins while reinvesting back into the business.
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