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K2 Asset Management’s Stephen Scott on three companies he favours for 2021

April 21, 2021

K2 Asset Management’s Stephen Scott on three companies he favours for 2021

Stephen Scott leads K2 Asset Management’s Annapurna Microcap Fund alongside fellow Contango microcap alumni Bill Laister.

Stephen Scott leads K2 Asset Management’s Annapurna Microcap Fund alongside fellow Contango microcap alumni Bill Laister.

Mr Scott recently shared his views on investing with Reach Markets, and gave guests of the fortnightly ‘The Insider: Meet The Fund Manager’ webcast, a list of three businesses he believes are strongly positioned in the current trading environment.

SDI Limited (ASX: SDI)

SDI is one company Mr Scott believes will benefit from growth in the cosmetic products market. The company produces specialist dental products including cements and sealants for medical professionals.

Mr Scott even has first-hand experience watching the company produce some of these goods.

“We’ve been to the premises, we’ve seen fillings being made right before our very eyes,” he told webcast guests.

Importantly, the company also produces teeth whitening products – which Mr Scott highlighted as a key way into the growing industry for cosmetic treatments.

Click here to watch Stephen’s insights on SDI Limited.

 

PayGroup Limited (ASX: PYG)

Established financial technology companies are a basket Mr Scott feels very positively about under the current market circumstances.

PayGroup – which provides payroll and human capital management software-as-a-service – fits this bill nicely.

“We think they occupy commanding heights in terms of their role within business, they’ve got good reference customers, and interestingly enough their market cap to their annual recurring revenue is relatively low compared to other software businesses,” he said.

Click here to watch Stephen’s insights on PayGroup Limited.

 

SECOS Group (ASX: SES)

One of the few highlights of 2020’s year indoors were stories and videos of dolphins returning to Venice’s canal as reduced traffic on the famous waterways resulted in cleaner water for the purported porpoises to swim in.

These videos were sadly fakes (although the animals did make a surprise appearance in 2021), but prompted avid discussions about pollution and the environment.

Mr Scott tipped SECOS Group as one business which stands to benefit from this budding interest in sustainability.

SECOS manufacture sustainable and biodegradable plastic packaging and materials.

“We think that packaging is increasingly going to lean towards being biodegradable and sustainable,” he said.

“We believe that they’re [SECOS Group] well positioned to participate in this trend”, he further added

Click here to watch Stephen’s insights on SECOS Group.

 

This article is a summary of the information Mr Scott shared with us during our fortnightly ‘The Insider: Meet the Fund Manager’ session. You can watch a recording of the full session here, or you can click here to book into our next installment of the series.

 

Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets position.

Any advice contained within this presentation is general advice and does not consider your personal circumstance, you should consider whether it’s appropriate for you.

The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.

 

Sources:

 


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