High conviction: What we’re backing for the long term

LiveWire09-23

The Australian market looks expensive, especially among large caps, but that doesn’t mean that there aren’t opportunities. It’s been a successful twelve months for local investors. In late August, the...

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It’s also returned just under 11.0% including dividends over the last twelve months. At the smaller end of the market, the S&P/ASX Small Ordinaries is up 25.4%, including dividends, during this time.At Livewire Live 2025, Simon Mawhinney, Managing Director and Chief Investment Officer of Allan Gray, and Mark Landau, Joint Managing Director and Chief Investment Officer of L1 Capital, painted a cautious picture, but one where pockets of value still exist.L1 Capital’s, Mark Landau, who has the benefit of being able to scour the globe for opportunities and go both long and short companies, agreed.“If you compare it to NASDAQ, which is a more expensive market, it's about 30 times earnings, but earnings growth for the NASDAQ is about 15%. So, i","collect":0,"end_time":0,"defaultTopTitle":"livewiremarkets.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"NEM.AU":"Newmont Corp","NVDX":"2倍做多NVDA ETF-T-Rex","NVD3.UK":"LS 3X NVIDIA","LU1242518931.SGD":"Fullerton Lux Funds - Asia Absolute Alpha A Acc SGD","LU2361044949.HKD":"WELLINGTON US QUALITY GROWTH \"A\" (HKD) ACC","NVD":"2倍做空NVDA ETF-GraniteShares","WBC.AU":"WESTPAC BANKING CORPORATION","LU2471134879.HKD":"INVESCO GLOBAL EQUITY INCOME ADVANTAGE \"A\" (HKD) INC","IMD.AU":"IMDEX LTD","NVDY":"NVDA期权收益策略ETF-YieldMax","2NVD.UK":"2X NVIDIA ETP","LU1496350502.SGD":"FRANKLIN DIVERSIFIED DYNAMIC \"A\" (SGDHDG) ACC","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","LU2471134523.USD":"INVESCO GLOBAL EQUITY INCOME ADVANTAGE \"A\" (USD) ACC","NVDD":"1倍做空NVDA ETF-Direxion","BK7508":"医药生物股","XKO.AU":"标普/澳交所 300指数","WES.AU":"WESFARMERS LTD","LU0029864427.USD":"TEMPLETON GLOBAL \"A\" (USD) INC","LU2360032135.SGD":"ALLSPRING GLOBAL EQUITY ENHANCED INCOME \"A\" (SGDHDG) INC","LU0276348264.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN\"AUP\" (USD) INC","MIN.AU":"MINERAL RESOURCES LTD","NVIW.SI":"NVDA 3xLongSG261006","LU0979878070.USD":"FULLERTON LUX FUNDS - ASIA ABSOLUTE ALPHA \"A\" (USD) ACC","BK7504":"锂钴概念","LU0082616367.USD":"摩根大通美国科技A（dist）","3NVD.UK":"LS 3X NVIDIA","BK7110":"铜","CBA.AU":"COMMONWEALTH BANK OF AUSTRALIA","LU0266013472.USD":"AXA WF - Framlington Longevity Economy A Cap USD","SNVD.UK":"LS -1X NVIDIA","CSC.AU":"Capstone Copper Corp","BK7041":"综合货品商店","XAO.AU":"标普/澳交所 普通股指数","NAB.AU":"NATIONAL AUSTRALIA BANK LTD","LU1066051498.USD":"HSBC GIF GLOBAL EQUITY VOLATILITY FOCUSED \"AM2\" (USD) INC","NVD2.UK":"2X NVIDIA ETP","NVDS":"1.5倍做空NVDA ETF-Tradr","LU2272731782.SGD":"Allianz Global Intelligent Cities AM Dis H2-SGD","LU2272731600.USD":"Allianz Global Intelligent Cities AM Dis USD","LU1064131342.USD":"Fullerton Lux Funds - Global Absolute Alpha A Acc USD","NVDU":"2倍做多NVDA ETF-Direxion","CSL.AU":"CSL LIMITED","BK4592":"伊斯兰概念","GMG.AU":"GOODMAN GROUP","XJO.AU":"标普/澳交所 200指数","NVDS.UK":"LS -1X NVIDIA","ANN.AU":"ANSELL LTD"},"translate_title":"高度信念：我们的长期支持","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"3NVD.UK":0.6,"CBA.AU":1,"NEM.AU":1,"SNVD.UK":0.6,"XAO.AU":0.9,"NVDD":0.6,"NVDX":0.6,"ANN.AU":1,"NVD3.UK":0.6,"NVD":0.6,"IMD.AU":1,"NVDY":0.6,"WBC.AU":1,"XKO.AU":0.9,"NVDS.UK":0.6,"MIN.AU":1,"2NVD.UK":0.6,"NVDU":0.6,"GMG.AU":1,"NAB.AU":1,"NVDS":0.6,"NVIW.SI":0.6,"CSC.AU":1,"CSL.AU":1,"WES.AU":1,"NVD2.UK":0.6,"XJO.AU":0.9},"content_text":"The Australian market looks expensive, especially among large caps, but that doesn’t mean that there aren’t opportunities.\nIt’s been a successful twelve months for local investors.\nIn late August, the ASX 200 closed over 9,000 points for the first time. It’s also returned just under 11.0% including dividends over the last twelve months. At the smaller end of the market, the S&P/ASX Small Ordinaries is up 25.4%, including dividends, during this time.\nAdd in rate cuts from the RBA, with more to come, and it looks like things are starting to heat up. Right?\nAt Livewire Live 2025, Simon Mawhinney, Managing Director and Chief Investment Officer of Allan Gray, and Mark Landau, Joint Managing Director and Chief Investment Officer of L1 Capital, painted a cautious picture, but one where pockets of value still exist.\nTop heavy and expensive\n“It’s nuts that they’re priced the way they are for the growth they’re delivering” said Simon Mawhinney when asked for his thoughts on Australia’s largest listed companies.\n\n\n\n\n\n\n\n\n\nSimon Mawhinney, Chief Investment Officer, Allan Gray\nMawhinney is one of Australia’s most renowned value investors and once said “I’d rather stick pins in my eyes” than buy shares in Commonwealth Bank (ASX: CBA). Something panel host, Centennial Asset management’s, Matthew Kidman, took great delight in reminding him, even handing him some pins Kidman found at home.\nAccording to Mawhinney, many of Australia’s largest businesses, such as Commonwealth Bank, NAB (ASX: NAB), Westpac (ASX: WBC), Wesfarmers (ASX: WES) and Goodman Group (ASX: GMG), have seen share prices rise despite earnings going backwards over the last three years. \nIn the case of Goodman Group, Wesfarmers and CBA, Mawhinney pointed out that, with a share price trading at around 27x next years earnings, these companies are valued similar to that of Nvidia (NASDAQ: NVDA), but with one core difference..\n“And there's a company you may have heard called Nvidia that also trades at 27 times next year's earnings and it's vilified by the press as expensive, but it's grown its earnings also at 27% per annum, whereas those other three companies are growing at 6% per annum collectively.”\nL1 Capital’s, Mark Landau, who has the benefit of being able to scour the globe for opportunities and go both long and short companies, agreed.\nAccording to Landau, Australia current earnings multiple of around 20 is the highest multiple the market has traded on for over 40 years, only the period just before the crash of the dotcom boom and the COVID pandemic when earnings were temporarily depressed comes close.\nHe believes there’s more value outside of Australia especially when you compare the local market's price-to-earnings growth or PEG ratio (around 3x) to the USA or Europe..\n“If you compare it to NASDAQ, which is a more expensive market, it's about 30 times earnings, but earnings growth for the NASDAQ is about 15%. So, it's about a PEG of two. And then again, if you look at Europe, Europe's on about 15 times, but you're getting about 10% earnings growth. So, a PEG of one and a half.”\nSuch numbers had Landau thankful for his global mandate.\nGlittering Global Gold\nDespite their bearish views overall, both were optimistic about the resources sector, particularly gold.\n\n\n\n\n\n\n\n\n\nMark Landau, Joint Managing Director and Co-Chief Investment Officer, L1 Capital\nL1’s gold fund, which has been operating for around six months, is up more than 65% during that time, that’s even with a hedge against the gold price. He thinks that despite gold’s rise, that it is still being overlooked by global investors who are still focussing on tech and AI.\n“I think what the market is missing at the moment is that I don't think the generalists have really got involved.\" - Mark Landau on gold. \nLandau isn’t invested in any ASX-listed gold producers but is a fan of Toronto-listed K92 Mining (TSX: KNT).\nIn Mawhinney’s case, who is bound to stay within Australia’s coastlines, Newmont Mining (ASX: NEM) has been a winner, but again, he finds local valuations hard to stomach noting that many trade on multiples of free cash flow that exceed their reserves and resource lives.\n“You're betting on two things. Either a successful exploration which has not been forthcoming in Australia or much higher gold prices.”\nSo, what are they backing for the long term?\nDespite what it sounds, both Mawhinney and Landau could see areas ripe with opportunity.\nWith the largest companies in the world investing billions to build data centres, Landau is very bullish on copper, describing data centres as “just a massive block of copper”. \nHis top stock pick though was again an international name – Canadian miner, HudBay Minerals (TSK: HBM). Closer to home, he also mentioned dual-listed Capstone Copper (ASX: CSC). Elsewhere in the resources sector, he liked Mineral Resources (ASX: MIN) and Imdex (ASX: IMD).\nIn Mawhinney’s case, he believes for the “first time ever” that CSL (ASX: CSL) is presented attractively relative to the broader share market. \nHe also was a fan of medical supplies company, Ansell (ASX: ANN). On top of the fact that it has been perpetually buying back shares, he also believed that it is not getting the appreciation it arguably deserves.\n“You pay a reasonable multiple for it, but it's a boring company and no one cares much for it. But it's those kinds of companies that we think probably protect capital the most and offer the greatest upside from here as well rather than the others.”\nValuations may be high, but, as explained by Simon Mawhinney, there is still value to be found, you just need to dig.\n\n\n\nNever miss an update\n\n    Enjoy this wire? Hit the ‘like’ button to let us know. \n    Stay up to date with my current content by \n    following me below and you’ll be notified every time I post a wire","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.35.12","shortVersion":"4.35.12","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2569973098","isCrawlerRequest":true}