Forager looks to gain from 'indiscrimate' tech sell-off
Forager Funds Management is ‘looking with more interest’ at the technology space after several names saw their share prices fall substantially.
Firms such as online retailers Redbubble and Kogan, which were COVID-19 beneficiaries last year, had seen their share prices fall significantly from the peak in the last few months.
Redbubble was down 37% since the start of the year while Kogan was down 45% compared to returns of 388% and 155% respectively during 2020.
Performance of Redbubble and Kogan since 1 January 2020 to 31 May 2021
Alex Shevelev, senior analyst at Forager, said: “Technology is looking tired. There is a lot of concern about interest rates across the world, enthusiasm is coming out of this space and it’s not just the high-growth names, the COVID-19 beneficiaries like Redbubble and Kogan had a lot of implied enthusiasm in their share price but have now drawn down substantially”.
Steve Johnson, chief investment officer, added: “The sell-off has been largely indiscriminate. You report great numbers and you get whacked, you report disappointing numbers and you get double whacked”.
As a result of the low prices, the firm said it was “looking with more interest” at possible technology names for its Australian Shares portfolio and that there were about eight to 10 names on its watchlist.
Two technology stocks that the firm already held was RPM Global and Life360 and the pair said both of these had been “largely ignored” by investors but were COVID-reopening beneficiaries.
The Forager Australian Shares fund has returned 115% over one year to 30 April, 2021, according to FE Analytics, versus returns of 54% by the Australian small and mid-cap sector within the Australian Core Strategies universe.
Performance of Forager Australian Shares versus sector over one year to 30 April 2021
AUTHOR
Laura Dew
Recommended for you
As ASIC chair Joe Longo pushes firms to prepare for the upcoming mandatory climate disclosure regime, what skills are necessary if firms are looking to expand their ESG teams?
First Sentier Investors has announced it will close four of its Australian investment teams amid a simplification of the business, with $14 billion expected to be returned to investors.
Over 90 finalists have been chosen to compete at the 36th annual Fund Manager of the Year Awards, to be held in Sydney on 13 June.
Clients may be asking their adviser whether there is still value in the US technology names after their rally, but Fidelity International’s Lukasz de Pourbaix believes they can still offer upside.
