Two fund managers take a look at the stocks climbing their way up the index into the ASX 20.
Hey, how are you doing? And welcome to Livewire’s Buy Hold Sell. I’m Ally Selby, and today we’re going to be taking a look at some of the stocks battling for blue chip status.
Those that are climbing their way up the index into the ASX 20. And to do that, we’re joined by Hugh Giddy from IML and Hugh Dive from Atlas Funds Management.First off the ranks today is QBE Insurance. It’s outperformed other insurers like Suncorp and IAG over the past year. It’s lifted around 11 per cent. Hugh, I’ll start on you this time. Is it a buy, hold or sell?It’s a hold. Rising interest rates helped them, but I think the market knows that.
Also, the business has been much more simplified. There’s not the nasties that we’ve come to expect from QBE. There’s no Argentinian workers’ compensation, Ecuadorian crop insurance or Columbia third-party motor, which has devilled investors over the years. It’s a much more simple story. I think it’s a strong buy. And you also have the falling Aussie dollar, which is a big beneficiary for QBE, unlike the domestic insurers.Next up, we have South32. It recently bought a 45 per cent stake in a Chilean copper mine. Hugh, staying with you. Is it a buy, hold or sell?: Sell. Catching a falling knife. Underlying unfriendly governments, which are only going to have their hands out for more taxes. And at the same time, the commodities are heading south.
In the long term, we’ve got an older, sicker population, doctors are more worried about malpractice, scheduling more tests and pathology. Unlike other healthcare companies that don’t require billions of dollars in FDA approval for new drugs, it’s an industrial boring process that suits me.Next up, we have Brambles. It’s a reusable pallets, crates and containers giant. Over to you, Hugh. Is it a buy, hold or sell?: I think it’s a sell. Twenty-five bits of wood, 80 nails.
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