Latest news with #AlexWright
Business Insider
5 days ago
- Business
- Business Insider
MercadoLibre downgraded to Hold from Buy at Jefferies
Jefferies analyst Alex Wright downgraded MercadoLibre (MELI) to Hold from Buy with a price target of $2,800, up from $2,450. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>>
Yahoo
11-05-2025
- Business
- Yahoo
Is this one of the most undervalued stocks on the London Stock Exchange?
With companies on the London Stock Exchange trading at dirt cheap prices, contrarian investors have been doing quite a bit of shopping in 2025. Among them is Alex Wright, the chief manager of Fidelity International's UK-focused funds. While most investors have been panicking about the impact of tariffs and the general cost-of-living crisis in the UK, Wright has a different view. Instead, he believes the UK's actually far more insulated against the brewing trade war and local economic conditions. So much so, he's started snapping up shares in big-ticket item retailers, including Howden Joinery (LSE:HWDN). Howden's known for its award-winning fitted kitchens. And with the firm's recent expansion into fitted bedrooms, it's arguably one of Britain's biggest players in the home renovation space. But with tax hikes by local councils, higher bills from energy and water companies, and rising internet and mortgage costs, the home renovation market isn't exactly firing on all cylinders right now. The impact of this has been reflected in Howden's latest results. While international performance remains robust, sales in the UK are basically flat as per its April trading update. Considering the company has historically posted double-digit growth, the slowdown has understandably spooked some investors. Consequently, around 20% of its market-cap has been wiped out since September. But could this be a buying opportunity? Wright's thesis is built around an incoming rebound within the home renovation market. Interest rates have steadily started coming down. That reduces pressure on all British businesses and households, and is expected to translate into more affordable bills, either through salary increases or price dips. At the same time, weaker competitors, particularly in the private sector, have been being eliminated from the market. Kitchen Love ceased trading in 2024. And both CTD Tiles and Homebase have entered into administration. That means Howden now has fewer rivals to contend with when the renovation cycle starts to ramp back up, creating opportunities to capture more market share. After all, despite the recent challenges, Howden remains a highly cash-generative enterprise. It's hard to argue with Wright's logic. Even more so considering I actually bought Howden Joinery shares back in August 2022 on a similar thesis. And so far, it's proven correct with my initial investment delivering close to 40% capital gains versus the FTSE 100's 16%. However, just like in 2022, an investment in Howden Joinery today isn't without its risks. Despite the bankruptcies, there are still plenty of competitors seeking to take advantage of the growing gap in the fitted kitchen market. At the same time, the company, despite being vertically integrated, is still reliant on a steady supply of timber. Considering an estimated 81% of timber used in the UK is imported, supply chain disruptions from expected trade wars could throw a spanner into the works. There are plenty of value opportunities on the London Stock Exchange to capitalise on right now. And all things considered, I think Howden Joinery could be one of them. So for investors seeking to snap up shares trading at a discount to their potential, this enterprise is definitely worth considering, in my opinion. The post Is this one of the most undervalued stocks on the London Stock Exchange? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Zaven Boyrazian has positions in Howden Joinery Group Plc. The Motley Fool UK has recommended Howden Joinery Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025
Telegraph
20-03-2025
- Business
- Telegraph
Stop missing out on the home advantage – this trust is primed for recovery
Questor is The Telegraph's stockpicking column, helping you decode the markets and offering insights on where to invest for the past six decades. The UK market remains firmly out of favour. Open-ended UK equity funds haemorrhaged £22.7bn in net outflows last year as retail investors pulled their cash. It is not hard to find reasons for this – the FTSE All Share has risen 82pc over the past 10 years, while the MSCI World index has delivered more than double that at 168pc, driven largely by stellar returns in the US. In addition, it is easy to dismiss the UK market for lacking the growth potential found in the US, given just 1.3pc of its value is represented by technology stocks. Questor recognises that GDP growth in the UK remains anaemic, while business confidence is suffering from rising taxes and the uncertain geopolitical environment. However, UK equity valuations have already priced in a lot of bad news, and it is worth recognising that more than 75pc of revenues of UK-listed companies come from overseas. The key catalysts for a recovery come in the shape of the wave of takeover approaches by overseas corporates and private equity, as well as the ongoing return of capital via share buybacks. These are already having an impact – the FTSE All Share is up 11.1pc over the past 12 months, beating the global market's 8.2pc. Questor believes a value investment approach is well placed to benefit in the current environment, and Fidelity Special Values investment trust – which recently passed its 30 th anniversary – offers precisely that. Over its lifetime the contrarian investment vehicle, focused on UK equities, has grown assets from less than £50m to more than £1.1bn. For the first 18 years of the fund's life, the portfolio was run by Anthony Bolton, one of the leading fund managers of his generation. He was never going to be an easy act to follow, but Alex Wright has continued to deliver strong performance since taking over as lead manager in September 2012, with annualised Nav total returns of 11.4pc versus 7.5pc for the FTSE All Share, outperforming in 8 of 12 financial years. The manager seeks out unloved companies trading at attractive valuations that are entering a period of positive change – ones the market hasn't cottoned on to yet. Utilising the resources of Fidelity's extensive research team, the investment universe includes large, mid and small-cap stocks, as well as up to 20pc in companies listed outside the UK. Risk is managed partly through diversification, typically holding 80-120 investments, with the largest representing less than 5pc of assets, a title currently held by Imperial Brands, at 4.5pc. In addition, stock selection focuses heavily on the potential downside risk. In part, this is achieved by buying companies that are valued cheaply relative to their history or peers, but also by avoiding businesses that are highly leveraged in order to limit the threat of permanent loss of capital. Furthermore, a strict sell discipline is imposed once a company's share price has recovered. Just 39pc of the current portfolio is invested in the UK's largest companies, compared with the benchmark's 86pc FTSE 100 allocation, demonstrating a bias towards the less well-covered mid and small cap stocks. The active management approach is illustrated by having no exposure at all to several of the largest companies in the FTSE All Share, including Shell, BP, HSBC and Unilever. As a result, the fund should not be expected to perform in line with the benchmark, and there will be periods of underperformance, as was the case during the Covid pandemic. By sector, the portfolio is typically overweight towards financials, and the largest holdings currently include Standard Chartered and NatWest, as well as Direct Line, which recently agreed a takeover bid from Aviva. However, some profits have been taken from banking shares over the past year following strong share price performance. As a result, the largest overweight sector is currently industrials, with holdings including Keller, DCC and Coats. By contrast, the fund is underweight towards energy and healthcare. Alex Wright also manages the £3.3bn open-ended variation – Fidelity Special Situations – which has a very similar portfolio. However, Questor favours the investment trust as it has a lower management fee and is currently trading at a discount to Nav of 5.6pc, with a commitment by the board to buy back shares to keep the discount in single figures. Over the long term the investment trust's performance has been enhanced by modest gearing – typically 10pc – and the ability to take positions in less liquid companies. Although the emphasis is on capital growth, it pays a yield of 2.9pc via semi-annual dividends, and has increased its dividend every year for the past 15 years.
