Fund Management
Top Stock Pick – Sorbus Partners
As investors face increasingly volatile markets, high inflation rates and geopolitical tensions, an investment manager highlights his firm's top stock pick this month.
Richard Farmiloe, lead fund manager of the Sorbus Vector Fund, a
UK All Cap Equity Fund, at private investment office Sorbus Partners,
highlights his top stock pick this month.
"Unilever is one of our top picks to navigate the current
inflationary environment and also to provide investors with a
long-term growth opportunity,” Farmiloe told
WealthBriefing.
"With its strong collection of brands in beauty and personal care
(Ponds, Dove, Lynx aka Axe in emerging markets), homecare
(Comfort, Persil, Simple) and foods and refreshment (Magnum and
Ben & Jerry's Ice cream, Knorr, Hellmans), these everyday staple
consumer items should enable the business to withstand the coming
pressure on consumer pockets,” he explained.
“It has successfully restructured its portfolio in recent years
to a higher growth profile and its core brands, accounting for
over 50 per cent of total sales, saw growth of 9.4 per cent in
the first half of this year,” he added.
"In addition, the quality of its products and the brand loyalty
they engender provide the company with [the] ability to raise
prices and still retain customer loyalty, a key strength in
inflationary times and one that we think the markets consistently
undervalue,” he said.
"The long-term growth opportunity at Unilever is substantial:
around 75 per cent of its sales now come from the emerging
markets where, due to increasing wealth, a whole new
generation have the ability to purchase its products. This also
highlights another of the company's key strengths, its
distribution network in these developing countries including its
star performer, Unilever Hindustan in India. This has been built
up over many decades and would be incredibly difficult for a
newcomer to replicate,” he stressed.
"Finally, the presence of renowned shareholder activist Nelson
Peltz on the board adds spice to the shares potential upside," he
added.
