Antipodes Partners, which is the manager of Antipodes Global Investment Company Ltd (ASX: APL), has been scouring the global market for investment options and identified three which it feels are top options for value investors.
Which shares does Antipodes like?
The first share which Antipodes believes is great value is US-based specialty beauty chain, Ulta Beauty (NASDAQ: ULTA).
Client Portfolio Manager, Alison Savas, commented: “Ulta Beauty is one of the largest specialty beauty chains in the US. It’s a similar beauty concept to Sephora or Mecca here in Australia but stands apart for providing both mass and prestige brands to consumers under the one roof.”
Ms Savas believes Ulta Beauty can outperform the beauty industry’s growth by winning market share from department stores and smaller market participants. In addition to this, the company’s strong online business is expected to be a key driver of growth.
“COVID forced Ulta to shut down its 1,200 stores, but the business was well placed from earlier ecommerce platform investment. Its online sales have grown triple digits but Ulta also remains a reopening beneficiary as customers get back to their stores for the unique advice and experience from testing products and getting treatments,” she added.
A retail property option.
The portfolio manager also sees an opportunity for investors with Simon Property Group (NYSE: SPG). It is a dominant force in the US retail mall and outlet sector with a share of over 40% of the premium malls and outlets. This makes it a go-to partner for US retailers, according to Antipodes.
While trading conditions will remain volatile in the near term, Ms Savas believes Simon Property Group is well-placed for the future. An added bonus is the attractive dividend yield it offers.
She explained: “Adjustments are occurring in the retailing industry. Some Simon tenants will disappear, as they have during prior retail cycles, but they’ll be replaced by other retailers looking for access to high traffic real estate. Whilst waiting for sentiment to improve, Simon pays a sustainable 6% cash dividend yield.”
A beverage giant to buy.
A final option that Antipodes believes offers a lot of value is the global parent of Coca-Cola Amatil Ltd (ASX: CCL) – The Coca-Cola Company (NYSE: KO).
Ms Savas believes the beverage giant is well-placed to benefit once the pandemic passes.
She explained: “We believe Coca-Cola is another great reopening play. Coke generates just over 40% of its global revenue from on-premise consumption – which is cafes, restaurants, bars and entertainment/sporting venues. These have all been shuttered thanks to lockdown and social distancing.”
“As well as a reopening opportunity, Coke is distinctive from most other consumer staples by retaining strong influence over its bottler supply chain, right up to delivery and stocking customer shelves. This helps the business keep distribution costs low, maintain customer relationships and sustain pricing power,” she added.
The portfolio manager expects the company to grow faster than its peers, leading to a re-rating of its shares to higher multiples.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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