This top-performing value fund sees opportunity in Meta
The Liontrust Tortoise Fund has beaten 99% of other long-short equity funds this year (19% return).
Their success this year has come from:
- Pivoting towards defensive sectors like Consumer Staples and Healthcare — sectors that have outperformed this year.
- Betting against the S&P 500 and US tech stocks with “relatively large” short positions.
Recently, they’ve taken on a new stance: “cautiously optimistic.”
Tortoise is a value-focused fund — buying shares in companies at “cheap” levels. This excluded many high-growth tech stocks in recent years.
But now tech has fallen so low that Tortoise sees parts of the industry trading like value stocks.
One name, in particular, caught their interest: Meta.
After a 70% drop in their shares, Tortoise initiated a new position in last month. Their reasoning…
- Strong fundamentals: Solid cash balance, growing user base and cost-cutting measures.
- Value-like prices: At an 11x price-to-earnings multiple — Meta is cheaper than half that of last year.
At these levels, Meta is cheaper than non-tech stocks like Disney, Starbucks and Walmart. Value investors, we don’t blame you. Meta looks incredibly enticing at these levels.
