Earlier this week the Ophir High Conviction Fund (ASX: OPH) held its monthly Webinar for shareholders and investors.
For those that missed it, this morning the fund manager released a note which outlined a few key points it conveyed during the webinar.
One of the main points the fund manager made was that there are plenty of opportunities for investors after the coronavirus crash.
Investment opportunities.
Ophir's portfolio managers, Andrew Mitchell and Steven Ng, revealed that they continue to focus on investing in well managed companies with modest levels of debt and positive long term growth prospects.
But how are they selecting these companies during the crisis? The portfolio managers advised that they have a multi-step process they have been following during the COVID-19 crisis.
This includes reducing exposure to companies most at risk from the crisis and increasing exposure to those that are less at risk, or at least not negatively exposed, that it believes have been unfairly sold off.
In addition to this, the fund has been selectively and modestly buying some quality companies that fall into the at-risk category. However, the at-risk companies they have been buying are ones that they believe will make it through COVID-19 and re-emerge in a stronger competitive position.
Ophir named online travel agent Webjet Limited (ASX: WEB) as an example of an at-risk company it has been buying.
It explained: "We recently participated in the capital raise for Webjet, which we believe sees the company being able to survive an extended (12+ month) period of little to no travel globally. Whilst we believe it will likely be on the list of the First In, Last Out (FILO) companies in this crisis, its competitive position in its two key divisions, in which it has dominant positions, will likely only be strengthened as weaker competitors are hit harder."
What now?
While Ophir believes the next 3 to 6 months will be difficult for the global economy, it notes that the market has fallen heavily since February in anticipation of this.
As a result, the fund is busy looking at a number of ideas that it believes could provide strong returns over the medium to long term.
The portfolio manager commented: "We are continuing to find a large number of great secular growth ideas for the Fund. We are content to take a medium to longer term view with our core portfolio holdings, in recognition that no one can consistently pick the bottom of bear market downturns."
"We are seeing plenty of opportunities to incrementally invest our and our fellow investors' capital in the expectation of a high probability of making attractive risk adjusted returns on a 3-5 year horizon," they concluded.
