OC Funds Management’s Rob Calnon ‘bullish’ on micro-caps after national COVID roadmap unveiled

Australian equities are boasting healthy valuations after a strong recovery rally over the past year, and a new COVID roadmap means the good times could keep coming for small- and micro-cap companies.

Australian equities are boasting healthy valuations after a strong recovery rally over the past year, and a new COVID roadmap means the good times could keep coming for small- and micro-cap companies.

Speaking to Reach Markets ahead of his The Insider: Meet the Fund Manager presentation on Thursday, OC Funds Management portfolio manager Rob Calnon welcomed the steps taken in recent weeks to reopen the economy.

“There’s a clear roadmap that’s been agreed upon at a national level,” he said.

“The states are going to be hitting vaccination targets and they’ve abandoned the zero COVID target, which is clearly impossible to achieve under the Delta variant.”

While these changes will likely be bullish for small- and micro-cap companies, Mr Calnon said certain ‘reopening-exposed’ names will fare particularly well.

“We’ve got a fair swag of reopening-exposed stocks in the portfolio,” he said.

“We’ve got Monash IVF, Capitol Health, and HelloWorld – which is a travel agency – and we’ve got Viva Leisure, which is a gyms business.

“All of these positions will benefit from the Australian domestic economy reopening as we stretch towards the end of this calendar year and into 2022.”

“Although the caveat is that equity markets are at reasonable levels already.”

Sectors to watch

As the economy reopens, Mr Calnon said he is focusing on a number of sectors including oni-channel retail. He also has his eyes on the tech space, and expects this sector will continue to benefit.

Another sector he likes is green energy, owing to the renewed interest in renewable sources of power.

“Everyone is looking towards decarbonisation, so we’ve got a couple of positions that are exposed to green energy, whether it be hydrogen, uranium or other new battery minerals” he said.

Rob Calnon will be joining Reach Markets for The Insider: Meet the Fund Manager on Thursday, 23rd September, at 1pm (AEST) where he will discuss discuss OC’s 3 favourite stocks, their investment checklist for picking winning companies; and which companies OC think can benefit from the “reopening trade” on the back of the government’s COVID roadmap. This will be followed by an interactive Q&A. Book here.

‘The Insider: Meet the Fund Manager’ is a free webcast series which gives you direct access to prominent fund managers. This session is live and interactive and includes a live Q&A. Spots are limited, so please book into this session as soon as possible.


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