By Paul R. La Monica
It's been a tough market for just about everyone this year due to concerns about spiking oil prices and the Iran war. But value stocks are outperforming harder hit momentum and growth stocks -- as well as the S&P 500.
With that in mind, several top fund managers argued at the Value Invest New York conference Thursday that investors will still be better off if they bet on individual names as opposed to the broader market, which continues to be dominated by the Magnificent Seven and artifical-intelligence trade.
Cole Smead, CEO and portfolio manager of Smead Capital Management, talked about the mania in American capital expenditure cycles, with hyperscalers spending hundreds of billions of dollars on AI.
"Here's my best idea. Don't do anything stupid," Smead said, adding that instead of big tech he likes energy stocks, where he expects a wave of consolidation. He also argued that fears about private credit concerns in the banking sector are overblown.
"The market is not as problematic as people think," Smead said.
Other value fund managers talked specifically about some of their favorite ideas. Several of them were international stocks.
Brian Louko, portfolio manager for the Artisan Partners Global Special Situations Strategy fund, recommended Montana Aerospace, a Switzerland-based parts supplier for aircraft manufacturers. The company makes components for landing gear, wings and fuselage.
Louko said the company is a bet on the fact that global airlines will increasingly need to retire older planes in their fleets and replace them with newer aircraft. Montana should benefit from the fact that the market for parts is "deeply fragmented and highly specialized." Loukos added that the company is actively looking for a U.S.-based listing, which should boost its profile with investors.
Richard Garstang, a portfolio manager for Oldfield Partners, touted Pason Systems, a Canadian oil services company that makes electronic drilling recorders that sit on rigs and offer real time monitoring. Garstang said the company has dominant market share for Western- based land oil rigs. He described the company as a "data platform embedded in an industrial situation."
Simon Adler, a fund manager with Schroders, argues that investors need to look for unloved situations that are underpriced. Adler said his strategy is "unashamedly deep value" and that his team gets its idea by running screens that look for stocks in "the cheapest part of the market."
His pick? Japan's Nippon TV, despite the fears of the demise of the linear television business as streaming services continue to gain ground. Adler notes that the company has a solid balance sheet and that the stock continues to look attractively valued.
There are international opportunities in healthcare, another value-oriented sector as well. Rui Cardoso, a portfolio manager at Beutel Goodman, recommends Japan's Shionogi, a pharmaceutical company that is developing drugs for depression and ALS, more commonly known as Lou Gehrig's disease. He said these and other newer medications in its pipeline will help Shionogi manage the so-called patent cliff, when older drugs become subject to competition from cheaper generics.
The lesson? There are still plenty of compelling investing opportunities for those willing to look beyond the U.S.
Write to Paul R. La Monica at paul.lamonica@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
March 20, 2026 09:02 ET (13:02 GMT)
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