VALUE MANAGERS’ TOP COVID- 19 BUYS

Some value managers have been taking advantage of the sell-off to buy companies on the cheap. Alastair Mundy of Ninety One has bought shares in easyJet and Howdens Joinery. He said these companies were “fallen angels” that could weather the turmoil and come out of the disruption in a strong position.

Hugh Sergeant of River & Mercantile, a rival fund manager, said he was buying shares in Lloyds Banking Group and Anglo American, the miner. Both have seen their share price hammered amid fears over global economic growth and a coming recession.

He has also bought Tesco, which had been struggling in the past couple of years but is now witnessing robust demand. Burberry, the fashion house, is another purchase. The stock is normally associated with high growth but its shares sold off dramatically amid the Chinese lockdown.

Mr Chaitowitz of Nomura Asset Management bought a highgrowth business in Microsoft. He said: “I’ve waited years for its price to drop. Its transformation into a subscription service model makes it a fantastic investment.”

from going under and defaulting on their loans. “Value managers make most of their money during a sudden revival in stock prices,” he said.

The best way to be a value investor is to buy normally expensive companies that suffer uncharacteristic falls in their share prices, according to Ilan Chaitowitz of Nomura Asset Management.

Investors should wait for opportune moments to pounce on mispriced stocks. He bought Microsoft when its share price tumbled in March 2020 after waiting years for the opportunity.

“We could not find investment ideas last year when stocks were rising, but, when Covid-19 caused the best stocks to sell off with the worst, we took advantage of the mispricing. This is still value investing,” he said.