Winners and losers
The demand shock resulting from Covid-19 crisis really has no parallel in recent times. Key to this massive lockdown of activity is, for investors in stocks, to emphasis balance sheet strengths and leadership within sectors, as companies cut earnings expectation, suspend dividends and prepare for an unclear future.
Even more so than before, there will be winners exhibiting strong cashflows and financial strength, net cash balances, increasing market shares and visibility. On the other hand, companies with the weakest financial features will fail to adapt and will most likely exit the market. This winners / losers bipolar matrix is probably a sound way to identify rewarding investments in the long-term rather than the more traditional style (value vs growth) or economic sensitivity (cyclical vs defensives) approaches. Once more, it will support quality growth businesses, and to some extent thematic investing.
Long-term entry points
The recent equity sell-off has provided interesting buying opportunities for active and long-term investors. However, timing the bottom of a bear market is impossible, therefore Fund Managers have been phasing it in several waves for time diversification purpose. The aim is not to capture intermediate rebounds but rather to have good long-term entry points for existing or new stocks benefiting from positive structural trends: health, safety, digital payments, internet and media, next gen consumer, robotics & automation, IoT, clean energy & sustainability, cloud computing, AI & big data, etc …
Portfolio Managers spent a lot of time stress testing balance sheets and cashflow assumptions of their investments to ensure they can survive through the next months and years without any permanent or structural damage to their long-term investment prospects.
Stocks selected by fund managers
We have leveraged our extensive network of contacts in the industry and our long-time relationships among the best Portfolio Managers, to gain insight into their more recent allocation in portfolios.
You will find below a list of stocks that have been recently topped-up or added into the funds selected by us, or the funds we actively monitor in a Watch List.
For compliance reasons, we will not disclose funds’ name or sizing related with the below securities. Nonetheless, we hope this list can be a valuable help to support your idea generation within your portfolios at the single stock level.
WS Partners Team