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LivestreamMenuFund manager Sean Peche’s approach to investing is to buy ski jackets in summer and air conditioning units in winter. That’s why he’s eschewing the AI hype and skipping out on this week’s buzzy IPO from Chinese robot-maker UniTree , and instead focusing on the stocks he thinks are trading below their fair value. The portfolio manager at Ranmore Fund Management said one of the firm’s top 10 holdings is China’s Ping An Insurance . “It’s deeply out of favor. Now, this is one of the largest insurers in the world, but you can buy it on a 6% dividend yield,” Peche told CNBC’s “Squawk Box Europe” on Friday. “It’s trading below book value in Hong Kong, and most of the companies, most of the other insurers elsewhere in the world, are trading at premiums [to] book value, and are not yielding those kind of rates,” he said, refering to the company’s value versus its net assets. “Where you’ve still got a growing market, we think [that] is very attractive.” 2318-HK 5Y line Ping An Insurance. From cable networks to consumer brands Peche said one of the fund’s “ski jacket in summer” holdings was U.S. telecoms, media and entertainment group Comcast . At the start of this year, Comcast completed a spin-off of most of its cable news business — including CNBC — and in June announced plans to spin off more of its media assets , as it focuses on cable, wireless and business services. Comcast shares have declined by around 16% over the last year as they struggle to recover their 2021 peak, despite coming off recent lows. “We like Comcast because if you think about the business, okay, it’s clearly not in favor, but it’s got annuity income. You’ve got a huge client base. You’re not going to wake up tomorrow and find that they’ve lost a customer and, you know, 50% of their revenue is disappearing. Very savvy management… great cash flow,” Peche said. CMCSA 5Y line Comcast. Another company seeking to reverse a sharp deterioration in its share price is Guinness and Johnnie Walker owner Diageo , also one of Ranmore Fund Management’s holdings. Peche said there were positive signs beyond the headline that people are drinking less alcohol. “Guinness is a growing brand. Guinness Zero [non-alcoholic] is extremely popular. You know, that is a less crowded space than lagers,” he told CNBC. Peche also described Dave Lewis, who took over as Diageo CEO at the start of the year and has since announced a $1 billion restructure, as “very experienced” with proven “cost-cutting” credentials. “They’ve got lots of brands, and they’ve done some decent deals recently, selling their East African breweries, selling their cricket team in India. That all helps and we think that those those kind of transactions make sense… We think it’s in good hands.” DGE-GB 5Y line Diageo share price. Asia overlooked As AI continues to dominate market narratives, Peche is targeting some of the big Asian beneficiaries. “We’ve got Tencent ,” he said, referring to the Chinese technology juggernaut with products from cloud storage and gaming to messaging platform WeChat. “We’ve been buying Tencent at the same price as it was in 2018. Yet earnings have tripled,” he said. He added that the costs of running AI models in China were a “fraction” of what they are in the U.S., while those companies were also being more disciplined on capex. “The power cost is lower, the infrastructure costs are lower, and so we just think they’re pretty well positioned,” Peche said. 700-HK 5Y line Tencent share price.Read More
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