Fund Management

Top Stock Pick – Sorbus Partners

Amanda Cheesley Deputy Editor 7 October 2022

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.Β 

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. 

β€œIt 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.

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