In today’s environment of elevated uncertainty and short-term noise, the Nedgroup Investments Contrarian Value Equity Fund offers a clear alternative for long-term investors. Our philosophy is rooted in high conviction and patience. We are not chasing controversy or buying what is merely cheap. We are identifying durable businesses with the capacity to compound earnings over time. Through a rigorous bottom-up approach, we build a portfolio of between 30 and 50 companies from around the world with resilient fundamentals: defensible competitive positions, clear growth paths, trustworthy management teams and robust balance sheets.
Investment returns in excess of the benchmark index, in our view, are earned through stock selection, thoughtful position sizing and valuation discipline, both at entry and exit. We assess long-term intrinsic value across a range of outcomes, with particular emphasis on downside risk, and build positions incrementally. This long-term, unemotional approach allows us to build conviction in contrarian times when others might retreat. We look for misunderstood firms where quality is mispriced and long-term earnings power is underappreciated. Three recent additions to the portfolio reflect this mindset.
Three stocks to watch
Amrize (NYSE: AMRZ) is a building-materials company newly spun-off from Holcin, and is focused on North America, where secular tailwinds (such as investment in infrastructure, the undersupply of housing and onshoring) are underpinning long-term demand. With more than 1,000 sites and deep mineral reserves, it benefits from scale, vertical integration and proximity to key markets.
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We’ve known this management team throughout our long-term investment in Holcim, and believe that its disciplined capital allocation and operating efficiency will allow Amrize to boost earnings over the long term by expanding margins and making strategic acquisitions. As a standalone entity, Amrize remains underappreciated, creating a rerating opportunity as the market begins to recognise its true value.
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Hoshizaki (Tokyo: 6465) is a global leader in commercial refrigeration and ice-making equipment, serving hotel chains, restaurants, supermarkets, and convenience stores. While it is domiciled in Japan, its reach is global. The company’s strong brand, reliable products and entrenched relationships with distributors create a durable competitive advantage in a fragmented market. Given steady demand for replacement products and long-term growth in the sector, Hoshizaki offers resilient profits. Its conservative balance sheet and engineering-led culture support margin improvement through automation and global sourcing.
Becton Dickinson (NYSE: BDX) is a “picks-and-shovels” business for healthcare: it provides essential products such as syringes, catheters, and laboratory instruments to hospitals, laboratories and research centres. These categories carry high regulatory and trust barriers, and Becton Dickinson is a global leader in many of them. Its recurring revenue base is less sensitive to economic cycles and more aligned with long-term demographic and healthcare trends. Disciplined mergers and acquisitions, a focus on patients’ safety and expansion into emerging markets support consistent earnings growth. Becton’s ability to innovate while maintaining operational discipline makes it a durable compounder in our portfolio.
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