Glenmore stays bullish on small caps but sharpens its focus on valuation

LiveWire11-24

After years of “smalls are coming” chatter, Australia’s small and mid-cap stocks have finally delivered. Since April, the rally has been sharp and broad, with quality names re-rating hard as liquidity...

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Since April, the rally has been sharp and broad, with quality names re-rating hard as liquidity...</p>\n\n<a href=\"https://www.livewiremarkets.com/wires/glenmore-stays-bullish-on-small-caps-but-sharpens-its-focus-on-valuation\">Source Link</a>\n\n</div>\n","source":"livewire_stock","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Glenmore stays bullish on small caps but sharpens its focus on valuation</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nGlenmore stays bullish on small caps but sharpens its focus on valuation\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-11-24 04:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.livewiremarkets.com/wires/glenmore-stays-bullish-on-small-caps-but-sharpens-its-focus-on-valuation><strong>LiveWire</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>After years of “smalls are coming” chatter, Australia’s small and mid-cap stocks have finally delivered. Since April, the rally has been sharp and broad, with quality names re-rating hard as liquidity...</p>\n\n<a href=\"https://www.livewiremarkets.com/wires/glenmore-stays-bullish-on-small-caps-but-sharpens-its-focus-on-valuation\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK7129","symbol_name":"钢铁","start_time":0,"source_url":"https://www.livewiremarkets.com/wires/glenmore-stays-bullish-on-small-caps-but-sharpens-its-focus-on-valuation","article_id":"2585874354","we_media_id":null,"thumbnails":[],"rights":{"source":"livewire_stock","url":"https://www.livewiremarkets.com/wires/glenmore-stays-bullish-on-small-caps-but-sharpens-its-focus-on-valuation","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2585874354","pubTimestamp":1763928006,"columns":[],"sourceInfo":{"source_id":"livewire_stock","name":"Livewire Markets"},"weMediaInfo":null,"summary":"After years of “smalls are coming” chatter, Australia’s small and mid-cap stocks have finally delivered. Since April, the rally has been sharp and broad, with quality names re-rating hard as liquidity and optimism have returned to the pointy end of the market.Against that backdrop, I sat down with Glenmore Asset Management’s Robert Gregory and Rushil Paiva to find out whether the opportunity has already passed, or if there is still juice left in the small-cap trade.“We still see a lot of companies that we think can win market share, have a great product, great management team, and have an earnings growth story that really should play out over the next three to five years.In this conversation, Gregory and Paiva walk through where they are still finding value after the rally, why they are leaning into structural growth platforms in areas like wealth and payments, and how they are thinking about AI as a cost and efficiency tool rather than an investment thesis in its own right.","collect":0,"end_time":0,"defaultTopTitle":"livewiremarkets.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK7129":"钢铁","SLC.AU":"SUPERLOOP LTD","BK7062":"资产管理与托管银行","HUB.AU":"HUB24 LTD","BK7507":"资源股","ADH.AU":"ADAIRS LTD","NCK.AU":"NICK SCALI LTD","BK7021":"服装零售","WHC.AU":"WHITEHAVEN COAL LTD","NHC.AU":"NEW HOPE CORP LTD","BK7107":"家庭装饰零售","BK7055":"建筑与工程","CCL.AU":"Cuscal Ltd","BK7504":"锂钴概念","BK7095":"多种金属与采矿","BK7158":"交易和支付处理服务","BK7083":"煤与消费用燃料","BK7015":"非传统电信运营商","SMR.AU":"STANMORE RESOURCES LTD","BK7054":"投资银行业与经纪业","UNI.AU":"UNIVERSAL STORE HOLDINGS LTD","SHA.AU":"SHAPE AUSTRALIA PTY LTD","BK7089":"人寿与健康保险","PLS.AU":"PILBARA MINERALS LTD","GDG.AU":"GENERATION DEVELOPMENT GROUP","NWL.AU":"NETWEALTH GROUP LTD"},"translate_title":"格伦莫尔仍然看好小盘股，但更加关注估值","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"HUB.AU":1,"NWL.AU":1,"NHC.AU":1,"GDG.AU":1,"UNI.AU":1,"SMR.AU":1,"SHA.AU":1,"ADH.AU":1,"PLS.AU":1,"NCK.AU":1,"CCL.AU":1,"WHC.AU":1,"SLC.AU":1},"content_text":"After years of “smalls are coming” chatter, Australia’s small and mid-cap stocks have finally delivered. Since April, the rally has been sharp and broad, with quality names re-rating hard as liquidity and optimism have returned to the pointy end of the market. \nAgainst that backdrop, I sat down with Glenmore Asset Management’s Robert Gregory and Rushil Paiva to find out whether the opportunity has already passed, or if there is still juice left in the small-cap trade.\nAs Gregory put it to me, \n“We still see a lot of companies that we think can win market share, have a great product, great management team, and have an earnings growth story that really should play out over the next three to five years. \nWe’re still seeing lots of opportunities out there, but undoubtedly you have to be more selective now versus five to six months ago.”\nIn this conversation, Gregory and Paiva walk through where they are still finding value after the rally, why they are leaning into structural growth platforms in areas like wealth and payments, and how they are thinking about AI as a cost and efficiency tool rather than an investment thesis in its own right. \nThey also explain their continued conviction in unfashionable commodity exposures, the power of director buying as a signal, and the kind of balance sheets, management teams and earnings profiles that earn a place in Glenmore’s concentrated 40-stock portfolio.\n\n\n\n\n\n\n\n\n\nGlenmore Asset Management's Robert Gregory\nSmall caps after the rally: the bar has lifted\nThe starting point for Glenmore is simple: small and mid caps have already enjoyed a big move. Gregory notes that “we’ve had a big rally since April, particularly in small and mid caps” and that many of the businesses they focus on have “rerated fairly aggressively” over the last six months.\nAs a result, the opportunity set has narrowed and the team is doing more work at the margin. \n“We’re having to be more selective about what stocks remain in the portfolio and what stocks have been trimmed or exited just on valuation grounds,” Gregory says. \nThey have sold some names outright when they reach fair value and trimmed others while looking for “companies that have better valuation prospects and are probably earlier in the stage of their earnings growth cycle.”\nDespite the re-rating, the portfolio itself looks broadly similar to a year ago. Glenmore still holds around 40 stocks and turnover is “about the same” as usual, but there has been active recycling as prices have moved.\nBottom up first and last, not themes\nGlenmore’s philosophy remains bottom-up. Gregory is wary of chasing hot narratives. “If you get too into thematic type of investing, it can be a bit dangerous,” he explains. Themes tend to start cheap and attractive and then they start rerating up, says Gregory, creating the risk that too much of the portfolio ends up in crowded trades.\nThat said, the portfolio does naturally cluster around certain structural growth areas. Paiva highlights “big structural growth plays” like Hub24 (ASX: HUB) and Netwealth (ASX: NWL), where platform models and compulsory superannuation provide powerful tailwinds. Gregory adds that in businesses like this “the main game is actually what they’re doing operationally,” and that while multiples matter, they can be “a bit of a blunt tool” when companies are consistently winning share.\nOn the consumer side, Glenmore holds names like Adairs (ASX: ADH), Universal Store (ASX: UNI) and Nick Scali (ASX: NCK). Gregory stresses that these were not bought on a broad consumer thematic, but on specific company attributes: store rollouts, best-in-class management and market-share gains. \nNick Scali in particular stands out as “a very well run company” with strong Australian and New Zealand performance against a “fairly challenging” retail backdrop, and a UK acquisition (Fab Furniture) that is now showing tangible gross margin improvement.\nAI is a tool, not an investment thesis\nOn AI, Gregory is measured. “Right now it’s pretty small,” he says of its role in their investment process. Australian corporates are mostly “in that pretty early stage of trialling it to see if it can improve efficiency.”\nHe points to Generation Development’s (ASX: GDG) funds ratings subsidiary as one example, where AI may eventually automate parts of the fund review process, and notes that businesses like Hub24, Netwealth and Superloop (ASX: SLC) are starting to use AI in call centres and service settings. But he is clear: “I wouldn’t say it’s a big driver of how we think about whether to invest in a company at this point.” Over a five to seven-year horizon, he expects AI to lower costs across many businesses, but it is not yet a core valuation driver.\nCommodities, cycles and director buying\nWhile Glenmore avoids hot commodity thematics like gold and rare earths, they do hold positions in coal and lithium where they see mispriced cycles. Gregory remains positive on coal exposures such as Whitehaven (ASX: WHC), New Hope (ASX: NHC) and Stanmore (ASX: SMR), not because he expects explosive demand, but because prices have fallen to levels where “a lot of high cost producers aren’t making money.” That should constrain supply while these stocks trade on “quite cheap” valuations due to how out of favour the sector is.\nPilbara Minerals (ASX: PLS) is another example of their cyclical approach. Gregory describes the familiar lithium pattern of “huge run up, huge fall to a point where a large chunk of world supply is losing money,” and notes that PLS’s Pilgangoora mine is “one of the best assets in the world” with low costs and long life. A well-timed director purchase by CEO Dale Henderson gave Glenmore additional conviction. They have since trimmed the position as the share price recovered and the stock moved closer to fair value.\nDirector transactions are a consistent input into their process. “We do look at that quite actively,” Gregory says, highlighting prior wins in both coal and lithium where large on-market buying by CEOs flagged an attractive entry point. Meaningful purchases matter most; “smaller purchases probably don’t tell you quite as much.”\nFinding compounders: payments, construction and the watchlist\nPaiva’s discussion of payments company Cuscal (ASX: CCL) (recently listed but with a long operating history) illustrates the kind of compounder Glenmore seeks. Cuscal provides the infrastructure between Visa/Mastercard and banks or merchants, making it “one of those essential services.” The business enjoys “very sticky” customers, low churn, structural growth from cash to electronic payments, and a major cost-out opportunity following a recent acquisition. Paiva believes it can “do EPS CAGR close to 20% over a five-year timeframe,” with both earnings growth and multiple re-rating driving returns.\nShape (ASX: SHA), an office refurb and fit-out specialist, is another example. It is the market leader in a niche where 86% of work is indoors, reducing the weather-related volatility common in construction. Leases roll every five to seven years, creating recurring refurbishment demand, and Shape is seeing a strong pipeline in Victoria after several quieter years. Paiva highlights its “very well run” business, long tenure of key executives, and a “very strong balance sheet” with substantial net cash even after a recent acquisition.\nLooking ahead, Gregory says Glenmore's “main energy right now is focusing on stocks that aren’t in the portfolio that look like they potentially have the hallmarks of the company that could be in the fund for a long period of time,” emphasising great products, strong management and large addressable markets. The current watchlist sits at roughly 20 to 40 names, with 15 to 30 under active research. \nAll told, Glenmore sees the small-cap rally as real but survivable for disciplined investors: the easy money has been made, but for those prepared to be selective, focus on earnings and back genuine structural growers, there is still plenty to do.\n\n\n\nNever miss an update\n\n    Enjoy this wire? 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