Ask A Fund Manager: Shaw and Partners’ Adam Dawes reveals 2 hot buys right now and one stock that he’d keep in the drawer for years.
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Ask A Fund Manager
The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Shaw and Partners senior investment advisor Adam Dawes tells how one hot ASX share is providing the ‘warehouse of the future’.
MF: What are the 2 best stock buys right now?
Adam Dawes: In the large cap space, one that’s certainly been unloved is Treasury Wine Estates Ltd (ASX: TWE). Certainly, it has moved to the higher side from the $10 mark but I still think there’s a lot to go in that stock.
Certainly, we now know what the regulation or the issues from China are and it’s been quantified in the stock. Now the share price is starting to move because we were saying that, basically, Treasury Wines can still move their wine.
China has obviously been a big supporter of them but they can get that wine into China somewhere else. Whether that’s via Vietnam, they’re finding other ways to get that wine [in] and to move the product.
And there’s been a lot of talk about Penfolds being demerged from the TWE stable. I think that’s certainly going to be something that investors will really, really gravitate to, if and when that does happen.
A smaller one for you is Calix Ltd (ASX: CXL). We’ve got a buy on the stock. That’s an interesting one because [of] the wall of ‘green’ money that is coming down and the ESG investors continuing to shape [the] investment landscape.
Calix fits that bill quite nicely with their technology of taking heat out of cement production, as well as a couple of other things that they do. In the small cap space, that’s a really good pick for people to feel good about investing.
The royalties that they’re getting just from Europe alone is a company maker.
The ASX share for a comfortable night’s sleep
MF: If the market closed tomorrow for 5 years, which stock would you want to hold?
AD: Global Data Centre Investment Fund (ASX: GDC). It’s a sort of a small NextDC Ltd (ASX: NXT).
These guys, instead of staying in Australia, are obviously global. So they’ve got data centres all around the world in Latin America, France, Guam, those kinds of [places].
I think that’s a storage warehouse of the future.
I talk to a lot of clients about future-proofing their portfolio because Exxon Mobil Corporation (NYSE: XOM) was the biggest company 10 years ago in the world. It’s not today.
Let’s say Alphabet Inc (NASDAQ: GOOG), Apple Inc (NASDAQ: AAPL) and Microsoft Corporation (NASDAQ:MSFT) are the biggest companies in the world. Potentially they won’t be the biggest companies in the world in 10 years time as well.
So you need to be able to future-proof your portfolio. And one of those ones I think is GDC. So we’ve got a ‘buy’ on that one as well.
Every time you open up your YouTube, email, internet — data has to go somewhere. It’s also the number of Internet of Things that has grown in your house. It used to be 3 to 4 devices. Now it’s up to 12 devices that are connected to the internet at any one time inside your house.
Where does all that data go? It has to be stored somewhere and GDC fits that thematic.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tony Yoo owns shares of Alphabet (A shares) and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Alphabet (A shares), Alphabet (C shares), Apple, and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.