Summary List Placement
“Growth is the new value investing.”
That’s what Jim Osman, the founder of The Edge Group, said when asked how he’s dissecting today’s prevailing market landscape.
“I’m a value investor at heart, but it just is dead,” he said. “And it just hasn’t worked for years.”
He continued: “Any savvy investor is not going to sing the same narrative.”
When the market tides shift, so does Osman. That’s why he’s putting the crosshairs on companies that are focusing on what counts: technology and change.
Osman notes that astute investors have been rewarded for putting technology and special situations at the forefront of their methodology this year. And he expects that trend to continue.
But just because Osman has technology at the forefront of his focus, doesn’t mean he’s ready to blindly scoop up shares of high-flying, richly-valued companies — Etsy, Peloton, and DocuSign are a few that he mentions — that have had huge run-ups. His approach is more subtle.
He uses the phrase “back to the future” as a succinct descriptor of his thinking. Put differently, Osman’s on the lookout for companies incorporating an element of new technology into their business that the market hasn’t appropriately accounted for. And that’s leading him to believe a rally in price is on the doorstep.
In Osman’s mind, these back-to-the-future-esque stocks are leveraging their past to create a fruitful future. For his 200-plus clients who have a total of $400 billion under management and each pay a minimum of $1,000 a month for his research, that’s good news.
Here’s what he found.
1. Harley Davidson (HOG)
When it comes to Harley Davidson, Osman’s bullishness boils down to a few key facets.
“The Rewire” turnaround initiative, designed to cut company’s costs and improve operations
A new CEO who’s buying swaths of stock and is known for turning around disparaged companies
A newfound focus on digital marketing
An appeal to a younger audience via electric bikes and customizable, personalized accessories
“We believe it could be a double back to the $60 highs,” he said. “We see a catalyst with the restructuring, and we also see a CEO getting involved in being part of the turnaround by buying shares.”
2. Siemens Energy (ENR GR)
“Siemens is one where it recently, three weeks ago, announced the separation of its gas and power segment,” he said. “And what’s interesting about this is, there’s this big move to renewables.”
Osman says that the separation of these businesses is mutually beneficial, and should allow both entities to focus more keenly on operations and development. What’s more, Osman notes a massive order backlog that should provide a continuous stream of cash flows for the years ahead.
“Global energy markets are seeing strategic overhauls, and due to the increased awareness and the negative implications of climate change, there is an increase in demand for methodically changing power generation toward low-carbon energy sources,” he said. “Therefore, there is a strong demand for global players like SGRE who design, develop, manufacture, and install wind turbines for various wind conditions, both onshore and offshore.”
At a minimum, in the …read more
Source:: Business Insider