Two more stock pitches from the Value Investing Seminar in Italy
I hope you've been following along this week...
In Tuesday's, Wednesday's and yesterday's e-mails, I shared eight stock ideas that six speakers pitched at the 21st edition of the Value Investing Seminar in Italy earlier this month.
Today, I'll finish off the week by sharing two more ideas that other speakers presented...
1) Up first is Florian Weidinger of Singapore-based Santa Lucia Asset Management.
Florian pitched Zoomlion, a state-owned Chinese construction equipment maker with a listing on the Hong Kong Stock Exchange under the ticker 1157.HK (you can see his full presentation here).
Let's start with a price chart of the stock itself. As you can see, after a big spike and collapse in 2021, Zoomlion has traded largely sideways in recent years:
Florian argues that investors are too bearish on the stock – in his presentation, he explained that the stock traded at 8.9 times this year's estimated earnings with a roughly 6% dividend yield.
He believes that the weakness in the Chinese construction market is already reflected in the stock price – which fails to reflect Zoomlion's growing, high-margin overseas business:
He also argues that state-owned enterprises ("SOEs") are "the counterintuitively most investable companies in China."
As he says, that's thanks to reforms that are turning them from "fairly priced value destroyers trading at low single digit [price-to-earnings (P/E) ratios] to dramatically undervalued neutral-to-value-creating capital allocators."
Take a look at this slide from his presentation:
On a technical basis, Florian believes that the Hong Kong-listed "H shares" shouldn't trade at a big discount to the "A shares" that trade on mainland Chinese exchanges in Shanghai and Shenzhen.
He believes this discount will close, thanks in part to more Chinese investors moving to the Hong Kong exchange ("southbound flows"):
Lastly, Florian believes that investors are overly concerned about U.S. tariffs, which China is prepared for:
I have always viewed investing in China as outside of my "circle of competence." But the country fascinates me, and I'm always happy to learn more about it.
2) Lastly, Peter Krah of German Mining Networks pitched Vancouver, Canada-based Artemis Gold (ARTG.V), which is developing the Blackwater Mine in British Columbia.
He didn't release his full presentation, but he gave me permission to share some of his slides. Here's the overview:
As Peter explains in this next slide, the Blackwater Mine is set to grow its gold production dramatically – and at a low cost:
In the next slide, Peter argues that the stock has upside in three areas – expanding operations funded from internal cash flow, the price of gold rising, and potential new discoveries around the Blackwater Mine:
Artemis isn't undiscovered anymore... The stock has been on an absolute tear. It's up five-fold in the past two years – giving it a market cap of roughly C$6 billion. In the chart below, you can see the stock's surge:
However, Peter argues that the stock is still undervalued:
For any gold bugs among my readers, Peter's stock pitch for Artemis looks interesting.
Meanwhile, here at Stansberry Research, our Commodity Supercycles newsletter targets investments in the energy and natural resources space – including gold.
In fact, two of our gold-mining positions in the model portfolio are up by double digits... and another is up by triple digits.
We also released the July issue with our latest recommendation earlier this week – it's a platinum miner with massive reserves and consistent production. As we explain, it offers a great way to invest in higher platinum prices... with leveraged upside.
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Best regards,
Whitney
P.S. I welcome your feedback – send me an e-mail by clicking here.