Three small caps we like
We have key themes that drive investment decisions in the Montgomery Small Companies Fund to find innovative companies with a competitive advantage. In this short video Dominic and I present case studies on three high conviction holdings to give you a sense of some of the opportunities in the portfolio.
Macquarie Telecom (ASX:MAQ) – as a day one investment for Montgomery Small Companies Fund, MAQ has leverage to the Cloud technology theme. Enterprise computing is migrating to the Cloud. That Cloud has to live somewhere, that somewhere is a data centre. We find data centre business models very attractive. COVID-19 accelerated the demand for data centre capacity, and Macquarie Telecom responded.
Corporate Travel Management (ASX:CTD) – the reason we like this business is not just for its leverage to a recovery in travel activity, we believe this company has a very strong competitive advantage underpinned by its technology stack. The business has internally developed its own booking tool and what that allows is very significant margins that makes the business very scalable and material market share gains as the recovery unfolds.
Orocobre (ASX:ORE) – a lithium producer and lithium is one of those feedstock components that go into creating batteries for electric vehicles. The electric vehicle theme is being driven today by significant amounts of stimulus into the European market. The Europeans have got behind the green theme and particularly behind their automakers, making the transition from internal combustion engines to battery related vehicles. Orocobre’s assets are high quality, very competitive, low-cost curve positioned and that’s why we like it.
If you would like to find out more about investing in the Montgomery Small Companies Fund, please visit the fund web page: Montgomery Small Companies Fund
The Montgomery Small Companies Fund owns shares in Macquarie Telecom, Corporate Travel Management and Orocobre. This article was prepared 15 April 2021 with the information we have today, and our view may change. It does not constitute formal advice or professional investment advice. If you wish to trade these comapnies you should seek financial advice.
Gary Rollo is the Portfolio Manager of the Montgomery Small Companies Fund. Gary joined Montgomery in August 2019 after spending three years at MHOR Asset Management in Sydney as a Founder and Portfolio Manager. Prior to this, Gary was a Portfolio Manager at Renaissance Asset Manager in Sydney for six years. Before moving to Australia, Gary spent five years in London running Morgan Stanley’s Technology Sector Equity Research Team, as well as two years covering technology companies for JP Morgan.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
