One of the major attractions to investing in the listed funds management business, Treasury Group Limited (ASX: TRG), is the firm’s ownership interest in the well-respected fund manager Investors Mutual.
Investors Mutual (IM) has a long and proud history of outperforming the market and is run by its founder and portfolio manager Anton Tagliaferro. IM currently manages around $4 billion in funds and utilises a fundamental and value-based approach to investing. In a recent interview with The Sydney Morning Herald, Tagliaferro highlighted three stocks which he considers top picks.
1. Recall Holdings Ltd (ASX: REC)
The newly listed Recall was previously a division of Brambles Limited (ASX: BXB). In December last year Recall, which provides document storage and destruction services, was demerged as a stand-alone business. With the stock trading on a FY 2015 price-to-earnings (PE) ratio of less than 16 and a dividend yield of 3.8%, it looks reasonably priced considering Tagliaferro describes the company with the words “generates great cash flow and will grow earnings.”
2. Pact Group Holdings Ltd (ASX: PGH)
Pact is another recent addition to the ASX having also listed in December 2013. Pact is described as “extremely well managed” by Tagliaferro. As a manufacturer of packaging products throughout Australia, New Zealand and Asia, investors should also analyse Amcor Limited (ASX: AMC) and its recent spin-off Orora Ltd (ASX: ORA) to provide industry peer comparisons.
3. Ansell Limited (ASX: ANN)
Ansell has provided exceptional returns to shareholders over the past decade with share price appreciation alone of 154%; meanwhile the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) is up just 58% over 10 years. It would appear that Tagliaferro doesn’t view Ansell as ‘ex-growth’ but rather he sees a strong future for Ansell, describing the business as “well positioned to continue to grow through acquisitions and new products”.