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Why Schroders' A-rated Kirrage loves 'astounding' banks and retaliers
by Elsa Buchanan on Sep 18, 2013 at 10:46
He said: ‘Those stocks hide great investment opportunities as they fall on hard times but have the potential for recovery. They usually trade at astounding valuations.’
He is also continuing to see opportunities in financials, which comprise 27% of the portfolio.
‘Capital levels are four times where they were six years ago, yet those stocks still trade at discounts to their tangible assets,’ Kirrage said. ‘With price hikes such as the ones we have recently seen [Barclays was up 248% and Lloyds by 234% over the period], are they really such bad businesses?’
Overseas, Kirrage is finding recovery opportunities in Ireland through CPL, a recruitment company. ‘CPL is the archetype of a recovery stock, with huge amounts of cash to spare. Stocks like these don’t grow on trees.’
On the technology side, in which he holds 11.2%, Kirrage has recently reduced his position in US-based Seagate Tech, a hard-drive producer.
‘The stock fell to $12 after its production suffered from volatility in the resources sector. However, it has an impeccable balance sheet.’ The stock has recently reached $45.
Although bearish on basic materials and utilities because of their ‘unjustified high prices’, Kirrage has a 0.9% allocation to BP, to gain exposure to its refining business.
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