Marcus Bogdan, Portfolio Manager of the Switzer Dividend Growth Fund (Quoted Managed Fund) recently spoke to Peter Switzer on Switzer TV to discuss three beneficial stocks from the lockdown.
Watch the full interview here:
Peter Switzer (PS): Joining us now is Marcus Bogdan, the portfolio manager for Switzer Dividend Growth Fund and from Blackmore Capital. Thanks for joining us, Marcus.
Marcus Bogdan (MB): Thank you, Peter, and it’s good to be here.
PS: Mate, a couple of important questions. Sydney is in lockdown and a person from Sydney may be threatening your beloved City of Melbourne. Have you invested in any stocks that you think actually benefit from a lockdown?
MB: Well, we haven’t changed the portfolio because of the lockdown and primarily, it’s because we felt that the Coronavirus, and the variants that were seeing, were ongoing risks for both the economy and the Australian share market. Hence, we have been tilted the portfolio towards three areas that, generally, are more resilient and are beneficiaries of lockdowns.
They are in healthcare, primarily through our investment in Healius, which is the second-largest pathology company in Australia. You’ve seen a huge uptake in PCR or COVID testing in the last several weeks. In fact, those numbers are up over 200% compared to the March quarter. We believe that Healius will be absolutely a beneficiary of that. That is a central stock in the portfolio. The second area is in consumer staples. Even in the longer lockdowns that we’ve had previously in Australia, Woolworths, Wesfarmers and Coles, which were all in the portfolio have tended to hold up reasonably well, as people have stayed at home and they’ve restocked their pantries. The third area that we’re exposed to, which has generally been a beneficiary is online logistics. We get that coverage through Goodman Group, which is the largest distribution and logistics warehouse group in Australia.
PS: So, they are your three lockdown ones. Now, has there been an addition to the portfolio recently? If so, what, and why did you add it to the portfolio?
MB: Well, very much in the theme that we’ve been talking to, we have added to Endeavor in the portfolio, which was the spin out of Woolworths last month, is the drinks and the hotels business. Through the pandemic, the retail liquor business, BWS and Dan Murphy, have been very much a beneficiary of home liquor consumption. We expect that those trends will continue. We are also seeing that the underlying execution of that business is particularly encouraging. Ultimately, the smaller part of that group is the hotel’s division. When we finally do reach a level of normalization and re-open the economy, we expect the hotels business will be a beneficiary of that as well.
PS: It sounds like you’re punting on the likelihood that Australians will be drinkers. That’s not a very dangerous assumption. Not very dangerous man at all.
MB: Thank you.
PS: Marcus, thanks for joining us. Talk to you in a couple of weeks’ time.
MB: Thank you, Peter. Cheers.
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