The L1 Long Short Fund Ltd (ASX: LSF) raised over $1.3 billion back in 2018 in one of the biggest ASX listed investment company raisings ever on the back of unprecedented demand from retail investors.
Driving that demand was the hugely impressive track record of the fund managers running it.
In fact, from September 2014 to February 2018 (when the fund’s prospectus was issued) it had returned a staggering 36.9% per year net of fees to lucky investors.
Clearly, the stock-picking skills of the fund’s managers Mark Landau and Raphael Lamm are worth paying close attention to, even though the fund has got off to a disappointing start (falling around 10% in value) since its April 2018 listing.
The star stock pickers favour value investing over growth investing and today revealed some of their key long positions to investors. Here are two of their best ASX shares to buy.
Chorus Ltd (ASX: CNU)
Chorus Ltd is the monopoly owner of the copper telecommunications network in New Zealand (similar to Telstra Corporation Ltd (ASX: TLS) in Australia) and is investing $6 billion to build New Zealand’s fibre telecommunications network.
Chorus offers a 5% dividend yield and L1 is confident dividends “will grow at a significantly faster rate than other infrastructure and utility stocks over the next 5 years”. If L1 is correct, Chorus could offer investors excellent total returns in the next 5 years.
Mineral Resources Limited (ASX: MIN)
Mineral Resources Limited is trading cheap (at $13.76 today) according to L1 because the market is currently ascribing no value to its Wodinga Mine that is the world’s largest hard rock lithium mine.
According to L1, Mineral resources currently generates $250 million per year in EBITDA from its “predictable crushing contract order book” with the potential of its Mount Marion and Wodinga mines totally undervalued by the market.
According to L1, Mineral Resources trades on an FY 2019 price-earnings multiple of 9.7x and EV/EBITDA multiple of 5.1x.
On these valuation metrics it looks cheap, especially if L1 is correct about the potential of the miner’s other mining projects.
You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!
Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.
Motley Fool contributor Yulia Mosaleva has no interest in any shares mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.