Global stocks presenting a once-in-a-generation buying opportunity – Hans Lee

Markets have been difficult so far this year. The Dow Jones is on its worst losing streak since the Great Depression. Brent Crude Oil has been swimming above US$100 a barrel since late February (with virtually no reprieve since). On the macroeconomic front, inflation is at its highest level in two decades in Australia, while producer prices in Germany recently hit a high not seen since the end of World War II.

But as Warren Buffett has been known to say – more than once during this market turmoil – be afraid when others are greedy and greedy when others are afraid. But – Warren didn’t mention in his quote where you can afford to be greedy!

This brings me to a recent post by Dan Ives of Wedbush Securities – one of Wall Street’s most optimistic analysts on all things Tesla. He recently wrote this about the sell-off in US big tech stocks.

No one has a crystal ball, but we view this historic sale as a generational buying opportunity for good tech names/winners in 2023 and 2024 rather than a time to throw in the towel on the technology industry. technology with a stacking effect that we see happening on the streets today.

In this thread, we’ll take inspiration from that quote and look at some of the stocks that fund managers believe present a “once in a generation” buying opportunity.

Mary Manning, Alphinity Investment Management

In her view, Mary’s criteria for identifying a once-in-a-generation opportunity are three-fold.

  1. confidence that the business model will still be viable a generation from now;
  2. confidence that the stock has moved from an earnings downgrade cycle to an earnings up cycle; and
  3. rating support that signals a genuine buying opportunity, not an opportunity to catch a falling knife

With that in mind, choosing Mary for this thread involves a company with a sustainable business model, review support, and most importantly, the potential for improved profits.

ASML (NAS:ASML) “looks very attractive” with Mary adding that there are structural tailwinds at her back that could lead to gross margins of over 50% in the coming years.

ASML’s management likes to talk about the three main drivers of its action, which are structural, cyclical and geopolitical. The combination of these drivers is very powerful and supports a strong long-term business case for ASML.

On valuation, Mary says a correction of over 30% from its late 2021 highs has been healthy. On a P/E basis, the company now trades on multiples of 30x (as assumed multiples of 50x). She adds that the company has cash in the bank to protect its future.

“ASML’s valuation support stands in stark contrast to many unprofitable or barely profitable tech stocks without valuation support even at these levels,” Mary notes.

Kieran Moore, Munro Partners

It is indeed rare that every industry in the world demands your product.

Kieran summed up his choice – NVIDIA (NAS: NVDA) – in this one line. He says he has all the characteristics of a ten-year-old winner who can provide all the components for the future of business.

“We believe the semiconductor market is about to enter an era of artificial intelligence that we estimate will double the size of the industry in the next 10 years,” Kieran tells me.

But given that semiconductors are a huge megatrend and there are so many worthy global competitors (TSMC, Micron, Intel to name a few), why would you support that particular name? Kieran says this is the complete package.

The reason for owning Nvidia is that it will provide the complete platform to enable the doubling of the semiconductor industry in the age of AI. It is now one of the biggest companies in the world as people are starting to recognize this opportunity.

Lachlan Hughes, Swell Asset Management

The final pick from this trio is a name every person should know – Amazon (SIN: AMZN). Despite a P/E valuation of over 50 and a host of headwinds including supply chain challenges and intense labor competition, Lachlan believes the issues will be transitory.

“Recent market volatility has created an opportunity to buy Amazon at a significant discount to its intrinsic value,” Lachlan tells me.

But even that’s not the crown jewel. Lachlan says the real secret lies in its cloud business – a segment that alone could be worth US$1 trillion.

“At the current share price, its retail business, including the nascent digital advertising opportunity, represents a free option for investors,” Lachlan said.

“We value Amazon’s global retail and advertising business at over $1 trillion, which means, together with AWS, our valuation exceeds $2 trillion, a significant discount to its market capitalization. current stock market of $1.2 trillion.”

Stay tuned!

Following these global picks, we’ll be looking at a group of picks focused on opportunities on the ASX! Going by this article, we’ll be looking at some original ideas from the smartest money managers on the street.

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I will be responsible for asking the questions of Australia’s top strategists, economists and bond fund managers. If you have any questions, email us: [email protected]