With the S&P/ASX 200 (INDEXASX: XJO) down nearly 8% in the past month some leading fund managers believe value has started to emerge in certain pockets of the market.
According to a report in the Australian Financial Review (AFR), Anton Tagliaferro – founder of fund manager Investors Mutual – has been buying a few banks and listed property trusts.
Meanwhile the head of equities from Perpetual Investments, Matt Williams, let on that his fund had been topping up its holding in Tatts Group Limited (ASX: TTS).
Crown Resorts Ltd (ASX: CWN) and Henderson Group plc (ASX: HGG) have also been in the sights of funds managed by Perennial Investments.
This selection of stocks being bought by these leading fund managers could make a good starting point for those looking for new ideas.
The banks have all fallen roughly in line with the market falls over the past month and are currently trading at close to their lowest prices in the past year. With the banks all trading on multiples below the market average (which is where they should be) and offering investors fully franked yields above the market average now could be a sensible time for long-term investors to add bank stocks to a diversified portfolio.
Tatts Group is trading on a forecast fully franked yield of 4.9% and a price-to-earnings (PE) ratio of 17x – this could hold appeal to those seeking a defensive investment.
Crown Resorts is forecast to grow earnings at a solid clip in the next few years. Given the earnings growth profile, with the stock available on a PE of just 14.7x and with a partially franked yield of 3%, Crown arguably looks inexpensive.
Lastly, Henderson Group is trading on a forecast PE ratio and unfranked yield of 14.3x and 4.6% respectively. For a global fund manager that is enjoying a tailwind of increasing funds under management this stock could also be worth a closer look by investors.
