This could be the best investment opportunity that Australian investors have had in a decade.
Those are the words of portfolio managers from Perennial Value Management.
According to its latest monthly report, the investment company's portfolio managers, Sam Berridge and Andrew Smith, have been very busy buying shares following the coronavirus crash.
They commented: "Seeing what we believe as the best investment opportunities in a decade we have moved close to fully invested with 1.2% cash at month end with 65 positions in the portfolio."
How is Perennial investing during these turbulent times?
Although the money managers have been busy buying shares, they haven't just been buying everything that has been sold off.
Perennial quickly adjusted its portfolio and cut loose the shares which it believes will be vulnerable in this environment and loaded up on stocks that are likely to experience strong demand.
Two of the shares the company has been buying are meal kit company Marley Spoon AG (ASX: MMM) and biotech company Genetic Signatures Ltd (ASX: GSS). The latter has an efficient test for COVID-19 which has recently been approved in Europe.
This has proven to be an astute move by the money manager. Both Marley Spoon and Genetic Signatures have been very strong performers since the start of March with gains of 326% and 69%, respectively.
Where should you invest now?
Perennial has taken advantage of share price weakness to buy the likes of payments company EML Payments Ltd (ASX: EML), ecommerce company Kogan.com Ltd (ASX: KGN), investment company Navigator Global Investments Ltd (ASX: NGI), and telco Uniti Group Ltd (ASX: UWL).
It expects Uniti Wireless to benefit from strong broadband demand and sees Kogan as well placed given it is a pure online retailer.
Outside this, the company has been putting capital to work in existing investments which have been caught up in the selling but have more defensive attributes that are poorly understood by the market.
One of these is Limeade Inc (ASX: LME). It believes the employee experience software solutions provider is well-placed to benefit from the work from home initiative and notes that it has a strong balance sheet.
Perennial's portfolio managers also see opportunities in the mining sector and have added equipment rental company Emeco Holdings Limited (ASX: EHL) and engineering company SRG Global Ltd (ASX: SRG).
They explained: "Our discussions with numerous industry participants and our read of government policy leads us to believe the Australian mining sector will not be subjected to a compulsory shutdown of operations."
"Innovations to avoid the spread of COVID-19 by the miners and their contractors have been impressive to date. As a result we view the large selloff in mining services as another attractive area to invest capital," they added.
Foolish takeaway.
I think Perennial Value Management is spot on with its assessment and now is a great opportunity to start investing in the share market.
