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Performance review: Henderson Rowe optimistic on finding value in a binary world
by Elsa Buchanan on May 14, 2014 at 15:16
Rowe is also backing small cap favourite Abcam, an antibody supplier, despite recent concerns about its growth in the US due to funding cuts.
‘They have been building their supply base. It is not expected to be the next Amazon, but it’s a great model. Unlike Amazon, Abcam makes money, so I’d rather hold the latter.’
While Abcam is down 19.8% year-to-date, Rowe highlights it as a long-term holding and notes that a separate position in biopharmaceutical stock Shire is up 66% over 12 months.
Outside the UK, he is maintaining high conviction in US giant Tyson Foods, which he has held since late 2010.
‘It has a fantastic market presence and distribution system, and economies of scale,’ he said, adding the management was addressing some ‘ethical’ concerns. Over 12 months, the stock is up almost 70%.
While the business is primarily based in the US, it has been tapping into the theme of increased consumption of animal protein in China.
Conversely, Rowe dropped Polaris Industries, which makes snowmobiles, when the US stock hit its valuation target last month. ‘They were growing pretty fast, and the stock was up 39%, reaching our limits,’ he said.
Henderson Rowe’s average balanced portfolio is up 14.2% over 12 months, outperforming the MSCI All Country World Index benchmark, which rose 13.5% over the same period. Over three years, the average model posted 22% versus the benchmark’s 14%.
On a forward view, Rowe said that uncertainty about earnings growth is a concern, which was leading him to favour companies with dominant positions within their sectors.
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